BISSAU (Reuters) - The Supreme Court in Guinea-Bissau has upheld the nomination of Prime Minister Baciro Dja, bolstering President Jose Mario Vaz in a power struggle with a rival former prime minister.

Vaz appointed Dja in May after sacking then Prime Minister Carlos Correia, a move that further divided the ruling PAIGC party and which Correia denounced as a "constitutional coup d'etat".

"The legal proceedings brought by the PAIGC (against the nomination) are null and void and therefore inadmissible," the court ruled late on Friday, according to a decision broadcast on local radio.

"The presidential decree that appointed Baciro Dja as head the government of Guinea-Bissau is indeed constitutional."

Vaz sacked Correia and his government on May 12, saying they had proved incapable of managing a months-long political crisis, caused partly by the overlapping duties of the president and prime minister in a semi-presidential system.

A bank bailout that was condemned by donors as ill-advised and serving only the ruling elite has prompted the IMF to remove budget support, triggering economic meltdown and a gaping budget deficit.

Adding to its woes, Guinea-Bissau this month confirmed its first three cases of the Zika virus in a group of islands off its coast, a development that risks providing a gateway for the disease to reach the African continent.

The United Nations fears a protracted political crisis will trigger unrest. The former Portuguese colony is notoriously unstable and has seen nine coups or attempted coups since 1980.

Vaz, a former finance minister, was elected in 2014 after the army was forced to hand back power to civilian politicians following a military coup.

Since independence in 1974, no democratically elected leader has served a full term in Guinea-Bissau. The political turbulence has also helped it become a major transit point for cocaine trafficked from South America to Europe.

(Reporting by Alberto Dabo, Writing by Tim Cocks, Editing by Angus MacSwan)