The supreme court on Thursday rejected the official publication of election results that showed Yanukovich had beaten Viktor Yushchenko in a run-off election held last Sunday.
In its ruling, the supreme court appeared to turn the tide of events in favour of Yushchenko, who has brought thousands of supporters on to the streets after alleging he was cheated out of the election.
A president cannot be sworn in without the result being officially published.
"The court ruling bars the Central Election Commission from officially publishing the results of the election and proceeding with any other action connected with this," the court said in a statement.
President Kuchma is to stay on in
power under the court ruling
The court said it would examine next Monday Yushchenko's complaint that the election of the Moscow-backed prime minister had been engineered by mass cheating.
Under the court ruling, outgoing President Leonid Kuchma, who endorsed Yanukovich only after long reflection, would stay on in power for now.
Yushchenko vowed no let-up in protests to overturn the election result and pressed forward with plans for a national strike to bring transport and industry to a halt.
Reacting to the ruling, prime minister and "winner" of the presidential election Viktor Yanukovich said the supreme court had no right to annul the results.
"I don't see any justification for that. The election took place. The central electoral commission recognised it and issued a final result. No one, even the supreme court, has the right to annul it," Sergei Tigipko, the prime minister's campaign manager, said in a statement.
At The Hague summit, the European Union and Russia locked horns over the elections, with Brussels stressing it would not accept the poll results while Russian President Vladimir Putin insisted that the results were "absolutely clear".
Dutch Prime Minister Jan Peter Balkenende, whose country holds the rotating EU presidency, said that the EU did not accept the results of the elections.
"The election did not meet the international standards. Therefore the EU is not able to accept the results," Balkenende told a press conference.
Putin in turn insisted that the results of the elections were clear.
Polish Nobel Peace prize winner
Lech Walesa (L) is mediating
"From my perspective, all issues should be addressed within the framework of the constitution and legislation. All claims should go to the courts," he told a press conference after the summit.
Meanwhile, Lech Walesa, winner of the 1983 Nobel Peace Prize, has met both the feuding leaders on a surprise peace mission.
Walesa addressed an adoring crowd through an interpreter to deafening cheers reminiscent of his days as Solidarity resistance leader that eventually saw the small underground movement topple Poland's communist government.
"I will hold talks here with everyone who counts," he said. "I hope they will want to talk to me. I hope we will be able to find points of compromise to resolve the issues."