ISTANBUL, July 15 (Reuters) - Turkey's ousted main opposition CHP leader said on Wednesday that preparations are under way for the possible establishment of a new political party, but any formal step would wait until after ongoing legal proceedings.

In May, a Turkish court annulled the Republican People's Party's (CHP) 2023 congress that elected Ozgur Ozel as chairman, citing irregularities. It reinstated as chairman Kemal Kilicdaroglu, the CHP's former leader who lost to President Tayyip Erdogan in the 2023 presidential election.

Ozel said the legal proceedings on an appeal to the ruling that ousted his leadership and a request to hold an extraordinary party congress could be completed within a couple of weeks, and if they are blocked, a new party could then be set up.

"A formal step could be taken towards the end of July or the beginning of August," Ozel said in an interview with Sozcu TV, when asked about the timing of the establishment of the new party.

The court's decision, described by critics as politically motivated amid an unprecedented legal crackdown on the CHP, rattled financial markets and fuelled concerns about democracy and the rule of law in Turkey. The government denies such assertions, saying the judiciary is independent.

The opposition's crisis could boost Erdogan's prospects of extending his more than two-decade rule of NATO-member Turkey in an election scheduled to be held by 2028, but which analysts say could come earlier if the government seeks to take advantage of the CHP strife.

(Reporting by Ezgi Erkoyun; editing by Philippa Fletcher)