India court verdict boosts Hindu nationalist figurehead

NEW DELHI, Sept 12 (Reuters) - The Indian Supreme Court rejected on Monday hearing a case that links the chief minister of western Gujarat state to deadly religious riots, a move that may help the opposition politician's chances if he runs for prime minister in 2014.

Narendra Modi, who has been popular for attracting investment in the booming west coast state, may be the best hope the Hindu nationalist Bharatiya Janata Party (BJP) has of beating the Congress party-led government in 2014 elections.

"God is great," he posted on his Twitter feed after the decision was announced.

But Modi, 61, is tainted by allegations he turned a blind eye to mobs that killed up to 2,500 people, mostly Muslims, in the 2002 riots. He has been denied a visa to the United States.

Still, polls show him to be the BJP's most popular lawmaker and he enjoys the support of prominent businessmen.

The top court ordered the case be passed on to a Gujarat tribunal, lowering its profile. It is still is looking at other cases related to the riots.

The ruling party said the Supreme Court had not let Modi off the hook and that a guilty verdict was still possible in the lower court.

Relatives of victims had asked the Court to prosecute Modi on charges that he colluded with the police to fan the violence.

"I am disappointed with the verdict," said Zakia Jafri, the widow of a politician belonging to the Congress party, who was killed by rioters, along with dozens of neighbours. She vowed to keep fighting the case in court.

Monday's ruling was welcomed by the BJP, a right-of-centre party that governed India from 1998 to 2004 and uses religion to mobilise voters.

Religious violence has often flared up in India. The Gujarat riots followed a fire on a train that killed dozens of people, mainly Hindu pilgrims. In March this year, 11 people were sentenced to death for starting the fire.

The BJP now hopes to capitalize on an anti-corruption protest movement led by activist Anna Hazare that electrified India's middle classes and made the government of Prime Minister Manmohan Singh look weak and indecisive.

Singh's Congress party is grooming Rahul Gandhi, the great-grandson of India's first Prime-Minister Jawaharlal Nehru, to be it's candidate in the 2014 polls. (Additional reporting Sanjay Pandey in Ahmedabad; Editing by Alistair Scrutton and Yoko Nishikawa)