The Istanbul head of Turkey's main opposition party, who cannot run in next year's elections but can still play a key role in rallying voters in the nation's biggest city, denied a new charge of insulting the president on Monday.

Canan Kaftancioglu was handed down a ban in June after Turkey's top appeals court upheld a five-year jail sentence against her on charges including insulting the president, meaning she cannot run as a candidate.

Under Turkish law, she was not required to serve the full sentence and was jailed for several hours in May before her release.

Kaftancioglu is widely credited for the opposition's victory in Istanbul local elections in 2019, which was the first defeat for President Tayyip Erdogan's AK Party in 25 years.

Prosecutors opened a new investigation against her this month over a speech in which she described Erdogan as a dictator.

In her statement to an Istanbul prosecutor, a copy of which was seen by Reuters, Kaftancioglu said using the term 'dictator' was legitimate criticism since Erdogan holds wide-ranging powers.

"It is a criticism directed at the president single-handedly having executive powers in the name of government; legislative powers as leader of the political party with a majority in parliament and judicial powers..." she told the prosecutor.

Presidential and parliamentary elections are due by June 2023 and polls show Erdogan trailing likely opposition candidates while his AKP and its allies look set to lose their parliamentary majority.

The European Court of Human Rights said last year the law on insulting the president, under which thousands have been prosecuted, should be changed.

Critics say Turkish courts are under pressure from Erdogan and the ruling party, an accusation the government has repeatedly rejected.

Kaftancioglu's liberal views put her at odds with the conservative, Islamist-rooted AKP and have made her a target of frequent attacks by Erdogan and his ministers.

"First of all, I am a woman. Their expectation is for women to not make a sound when someone wags their finger. I think that is one of the underlying reasons for the attacks on my person," Kaftancioglu Reuters in a recent interview.

Another reason was her success in organising the CHP provincial group, she said.

Under her leadership, the CHP has connected better with Istanbul resident for the first time, Kaftancioglu said.

"I have dreams for the world, for Turkey, for women, for politics in Turkey. These dreams frighten today's government."

(Writing by Ali Kucukgocmen; Editing by Tomasz Janowski)