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Turkish President Recep Tayyip Erdogan on Tuesday welcomed an order by Turkey's top election body to re-run the recent Istanbul election, a move the opposition has branded an attack on democracy.

His ruling Justice and Development Party (AKP) lost the mayorship of Turkey's biggest city by a narrow margin and has refused to accept defeat.

"We sincerely believe there was organised corruption and irregularities," Erdogan told party members in parliament on Tuesday, saying the re-run was the "best step" for the country.

The main opposition Republican People's Party (CHP) has condemned Monday's decision by the Supreme Election Board to re-run the vote as "neither democratic nor legitimate".

Its candidate, Ekrem Imamoglu, who has been stripped of the mayorship after winning the March 31 election, was meeting coalition partners on Tuesday to discuss their strategy.

The loss of Istanbul, the country's economic hub, had been a shocking defeat for Erdogan's ruling party.

The AKP and its predecessors have ruled the city for 25 years, and it was especially sensitive for Erdogan, who grew up in the metropolis and rose to power after himself serving as Istanbul mayor.

"Erdogan goes against the will of the people," tweeted Kati Piri, European Parliament's Turkey rapporteur, "This ends the credibility of democratic transition of power through elections in Turkey".

German Foreign Minister Heiko Maas said Tuesday that the decision to annul the election was "not transparent and incomprehensible to us".

"Who holds the office of Istanbul's mayor can only be decided by the will of the Turkish voters," Maas said in a statement.

The European Union has called for the election body to produce its reasons "without delay".

"Ensuring a free, fair and transparent election process is essential to any democracy and is at the heart of the European Union's relations with Turkey," EU diplomatic chief Federica Mogherini said in a statement on Monday.

The AKP still won the most seats nationwide, but has been damaged by Turkey's first recession in a decade, as well as record-high inflation and a currency that has lost more than 12 percent of its value against the dollar this year alone.

Erdogan's critics say he has eroded rights by cracking down on dissent at home but for his supporters he maintains the image of a strong leader who speaks up for Turkey in the international arena.

The defeated mayoral candidate, former prime minister Binali Yildirim, a close Erdogan ally, said he hoped the re-run would "be beneficial for our city".

The US-based think tank the Soufan Center said the YSK decision marked "serious concerns" for the future of democracy in Turkey.

"Given restrictions on freedom of speech and Turkey's increasingly less independent judiciary, the recent election meddling is a clear signal to the Turkish people, and the world, that Erdogan is willing to pursue absolute power at any cost."

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