NEW DELHI (Reuters) - India's top court on Thursday temporarily barred the Italian ambassador from leaving the country, the latest escalation in a dispute over the killing of two Indian fishermen by Italian marines.

Italian President Giorgio Napolitano (R) meets two Italian marines Salvatore Girone (L) and Massimiliano Latorre (C) at Quirinale presidential palace in Rome, December 22, 2012. TREUTERS/Press Officer Presidenza della Repubblica

India had summoned the Italian ambassador this week to protest against Rome's decision not to send two marines charged with killing the fishermen while on anti-piracy duty back to India to face trial.

Separately, an Indian politician who heads a regional party has filed a petition in the Supreme Court against the Italian government over the decision.

The court ordered ambassador Daniele Mancini not to leave India, and to respond to the petition by March 18, raising questions about whether this violated the envoy's diplomatic immunity.

"The Chief Justice issued a notice to the Italian ambassador stating not to leave the country and has sought a reply from the ambassador by March 18," said Viplav Sharma, defence counsel for the Italian marines.

India's Supreme Court had allowed Massimiliano Latorre and Salvatore Girone to return home for four weeks to vote in last month's general election, provided they returned. They have not done so, and Italy's Foreign Ministry said the incident had become a formal dispute over U.N. laws.

"(The dispute) has shaken the confidence of the people whether foreign powers can take our Supreme Court so lightly. It is a very serious contempt," Subramanian Swamy, the politician who filed the petition, told reporters on Thursday.

India's Supreme Court said in a long-awaited ruling in January that India had jurisdiction to try the marines, but Italy has challenged that decision, arguing that the shooting took place in international waters.

The sailors arrived back in Italy on February 23, a day before the country's election, after India's Supreme Court granted their request to exercise their right to vote.

Italy's announcement the sailors would not return has sparked fury in India. The case has caused an uproar in parliament and Prime Minister Manmohan Singh's government is under pressure to respond forcefully.

Singh issued an unusually strong statement on Wednesday in which he accused Italy of violating "every rule of diplomatic discourse" and warned that if the sailors did not return "there will be consequences for our relations with Italy".

"We have to take steps, there is no question that we won't take any steps," Salman Khurshid, India's foreign minister, told reporters on Thursday.

"You can be certain that this is a matter that will be treated with the greatest urgency. It will be treated with determination to ensure that we do not suffer."

A government official said India was weighing what steps it could take, including expelling the ambassador, but that it was unlikely to take any action before March 22, when the sailors are due to appear again in court.

"I am the envoy. I will represent the government of Italy until the very moment when (a competent authority) would declare me persona non grata," Mancini told reporters on the sidelines of an event in New Delhi late on Wednesday.

(Editing by Matthias Williams, Ross Colvin, Robert Birsel)

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