* Polish judges say bill on top court reform is illegal
* Government says court verdict is non-binding
* EU, US concerned over rule of law in Poland (Adds background)
By Wiktor Szary
WARSAW, March 9 (Reuters) - Poland's top court ruled on Wednesday that the government's overhaul of the court was illegal, deepening a constitutional crisis that has stirred concerns about democracy and the rule of law in the EU's largest eastern member.
The ruling right-wing Law and Justice party (PiS) has enacted a law increasing the number of judges at the constitutional court required to make rulings and changing the order in which cases are heard. It has also rejected court appointments made by the previous government.
The government's critics say the changes undermine the court's effectiveness, while the European Union and the United States have also expressed concerns.
PiS says the changes are needed to reflect the new balance of power in Poland after its landslide election win last year.
"Dramatically limiting the court's ability to function independently and thoroughly contravenes Poland's (political) system and cannot be tolerated," Judge Stanislaw Biernat said, announcing the ruling at the end of a two-day court sitting.
The judges decided to bypass the new legislation, which regulates the way the court operates, in order to rule on it, relying instead on the constitution itself to reach a verdict.
The government swiftly rejected their ruling. It argues that the court is legally obliged to abide by the new rules, saying they are by default constitutional unless declared otherwise.
"The judges' verdict is not legally binding. If we accepted it, we would have to breach the constitution," Justice Minister Zbigniew Ziobro told a news conference.
"The Polish constitution says that the mode of the court's operation is defined by a (separate) bill," Ziobro added, referring to the very bill the court investigated.
The timing of the verdict is politically sensitive.
The Council of Europe, a human rights body, is due to issue an opinion this week on Poland's legal changes. A leaked draft of the opinion said the reform of the constitutional court threatened the rule of law in Poland.
The European Commission, the EU executive, has said it wants to see that opinion before making its own assessment of Poland's adherence to EU standards on the rule of law.
Critics say the changes, which prompted Brussels to launch the rule of law procedure for the first time in its history, have paralysed the court's work, making it difficult for judges to review, let alone challenge, the government's legislation.
The leader of the liberal group in the European Parliament, former Belgian premier Guy Verhofstadt, urged Prime Minister Beata Szydlo's government to respect Wednesday's verdict.
"Instead of further deepening the paralysis of the court and the constitutional crisis ..., Prime Minister Szydlo should now do what any other government of a democratic country would do: respect the verdict, publish it without delay and implement it," he said in a statement. (Additional reporting by Agnieszka Barteczko; Editing by Gareth Jones)