Israeli Prime Minister Benjamin Netanyahu has been forced to dismiss his leading ally, Aryeh Deri, from his new cabinet over the ultra-Orthodox politician’s tax fraud conviction.

Mr Netanyahu said he was “compelled, with a heavy heart” to comply with a Supreme Court order on Wednesday last week, which cited Mr Deri’s 2022 plea-bargain conviction for tax fraud, to terminate his dual appointment as interior and health minister.

The dismissal comes into effect tomorrow. Mr Deri’s Shas party has pushed for Mr Netanyahu to find a path back for him to rejoin the cabinet, with the prime minister pledging to find “any legal way” of doing so.

Following his dismissal, Mr Deri said that in light of the court decision “it was clear” to both himself and Mr Netanyahu that he would leave the government, but that he would not be withdrawing from political life.

He said: “No judicial decision will prevent me from serving and representing” the 400,000-odd Shas voters who gave his ultra-Orthodox party 11 Knesset seats in November’s elections.

Mr Deri vowed to continue to lead Shas as a lawmaker in the Knesset, chairing its faction meetings and attend meetings of coalition party chiefs. 

A spokesperson for Mr Deri said he will also retain his Vice Prime Minister title, which is largely honorific and carries no official authority. It is unclear whether it will permit Deri to keep an observer seat at the cabinet table, but the spokesperson said it was likely that the government would continue to invite the sacked minister to its meetings.

Mr Netanyahu addressed the dismissal in statement made directly to Mr Deri, who was seated beside him. He described the court’s order as an  “unfortunate decision”. It ignored the will of the Israeli people, he said.

He continued: “It was clear to all that you would serve in the cabinet as a senior minister.

“I reasoned that it was important that you serve the State of Israel as a member of the security cabinet in my government, where you could be of influence, given your years of experience as a member of cabinet in the governments of the late prime ministers Yitzhak Shamir and Yitzhak Rabin — rich experience that contributed to Israel’s security and resilience.”

It is not yet clear who will replace Mr Deri in the interior and health ministries. Normally, when a minister quits, his or her portfolios automatically revert to the prime minister for a temporary period until a new minister is appointed, but because Mr Netanyahu is himself under criminal indictment in connection to a separate corruption investigation, he is blocked by law from holding any cabinet seat other than the premiership.