By Ahmed Rasheed

BAGHDAD (Reuters) - Iraq's Supreme Court on Monday ruled against a decision by Prime Minister Haider al-Abadi to scrap three vice-president positions, weakening his political standing by overruling one of his most important measures to streamline the government.

One of the VPs was former prime minister Nuri al-Maliki.

Abadi was elected in 2014 with the support of Iraq’s top Shi'ite cleric, Ali al-Sistani, on a pledge to fight corruption, reform the government and defeat Islamic State.

Abadi canceled the VP positions in August 2015 as part of cost-cutting reforms following an oil price collapse that crimped state revenues.

Maliki, Abadi's predecessor, said the court decision "is respectable and corrects a mistake", according to a statement from his media office.

"The court ruling came at a fit time for Maliki who will further assert himself and send a message to other political parties that he’s still strong and nearly impossible to ignore," Baghdad-based political analyst Wathiq al-Hashimi said.

A close ally of Iran who leads the Shi'ite Dawa party, Maliki took the VP position in 2014 after losing the premiership to Abadi and taking the blame for Islamic State's sweeping offensive through northern and western Iraq.

The ultra-hardline Sunni militants still control vast swathes of territory in Iraq, including the city of Mosul.

Iraq's next parliamentary elections are due in 2018 but some lawmakers are calling for them to be held next year, after a planned offensive to try to dislodge Islamic State from Mosul, the last important city under the militants' control in Iraq.

The battle for Mosul could start as soon as this month with backing from the U.S.-led coalition forces.

(Writing by Maher Chmaytelli Editing by Louise Ireland)