Pakistani police surrounded the provincial assembly in the eastern city of Lahore on Thursday to stop supporters of former prime minister Nawaz Sharif meeting a day after a court ruling against him and his brother.
Pakistan teetered on the verge of a debilitating power struggle after the Supreme Court brought down a provincial government controlled by Sharif, President Asif Ali Zardari's main rival.
The court's decision to nullify the election last year of Sharif's younger brother, Shahbaz, as Punjab's chief minister and to leave in place an electoral ban on Nawaz raised fears of a return to the turbulence of the 1990s, a decade that ended in a military takeover.
A showdown between Zardari, widower of assassinated former prime minister Benazir Bhutto, and two-time prime minister Nawaz Sharif has been brewing since they forced former army chief Pervez Musharraf to quit as president last August.
Pakistan can ill afford the distraction of political turmoil.
The economy is only afloat thanks to an International Monetary Fund loan and Islamist militants threaten the security of the nuclear armed US ally.
The court's decision wiped 5 percent off share values on the Karachi stock exchange on Wednesday and the index dropped 3 percent at the open on Thursday.
In Lahore, capital of Punjab province, Sharif party members said they wanted to hold a debate in the provincial assembly but police had sealed off the building.
"When the people's representatives are barred from entering assemblies then what kind of democracy or justice can you expect," Ali Asghar Manda, a member of Sharif's party, said outside the assembly.
"We will continue our protest inside and outside the assembly until the restoration of true democracy, the removal of governor's rule and the withdrawal of the decisions against the Sharif brothers," he said.
Zardari imposed governor's rule, or direct rule by his representative, in Punjab for two months late on Wednesday.
Sharif has called for protests.
"I want to tell the nation that it should stand up to this lawlessness, to this judgement, to this unconstitutional judgement, to this villainous act by the president of this country, Zardari," he told a news conference in Lahore on Wednesday.
Sharif's party came second in a general election in February last year to Zardari's.
It later dropped out of a coalition with Zardari's party over a dispute over the restoration of judges Musharraf had dismissed in late 2007.