A tug of war over the prime minister post led on Wednesday to Phumtham calling for the dissolution of parliament. This would in turn have led to new elections.
But the court says no. "Disputed legal issues" make it deemed "inappropriate" to now submit the proposal for the king's approval, according to Phumtham.
Thus, the political chaos in Thailand increases. What the next step will be is not immediately clear.
The regular prime minister Paetongtarn Shinawatra was forced to resign last week after being convicted in the country's constitutional court.
The head of government was suspended from her duties as early as July 1 and since then Phumtham Wechayachai has replaced her as acting prime minister.
