CAIRO - An Egyptian court on Monday banned deposed President Mohamed Morsi's Muslim Brotherhood and ordered its funds seized, a crippling strike in the campaign to crush the Islamist movement.

The case was brought by a lawyer from the leftist Tagammu party on the grounds of protecting Egyptians from violence.

It was not stated if he was acting at the instigation of the army-backed government, which is mounting one of the fiercest crackdowns against the group in decades.

"The court bans the activities of the Muslim Brotherhood organisation and its non-governmental organisation and all the activities that it participates in and any organisation derived from it," presiding Judge Mohammed al-Sayed said in a ruling.

He also ordered the government to seize the Brotherhood's funds and administer its frozen assets.

The ruling did not specifically mention the Brotherhood's political wing, the Freedom and Justice Party.

But the state news agency quoted Freedom and Justice Party spokesman Hamza Zawbaa as saying the party rejected the ruling and would appeal.

"What is happening to the Brotherhood translates to a return of the police state after having removed it through the January 25 revolution," he said, describing the revolt that toppled autocrat Hosni Mubarak in 2011.

In Washington, a US State Department spokeswoman said it was unclear how the decision would be implemented and the Obama administration was seeking more information.

Spokeswoman Jen Psaki reiterated that the United States wanted to see an inclusive political process involving all Egyptians and leading to a return to democratic, civilian rule.

"All parties should avoid steps that would undermine this process," she said.

The Brotherhood has seen hundreds of its members killed and thousands arrested since the army overthrew Morsi in July.

The ruling may force the Brotherhood to go underground, especially as public support for it has dropped.

The court's decision also raises the possibility that some Brotherhood members will lose faith in peaceful resistance and take up arms against the government.

"How the Brotherhood responds to this verdict depends on the individual decisions of rank-and-file members, because the broader structure has largely ceased to function," said Eric Trager, an expert on the Muslim Brotherhood at the Washington Institute for Near East Policy.

Mohamed Beshr, a senior Brotherhood official, said the ruling would not impede the search for a political solution to Egypt's crisis.

"We want a state based on laws and institutions and we seek judicial independence far from politics. But what took place in today's ruling is against what we seek," he told the Brotherhood's Freedom and Justice online portal.

The authorities, meanwhile, kept up the pressure on the Brotherhood, arresting Ahmed Fahmy, the former head of the upper house of parliament under Morsi, according to state-run Al-Ahram newspaper.

The Brotherhood emerged from the shadows to win parliamentary and presidential elections after Mubarak was overthrown. But many Egyptians became disillusioned with Morsi after he gave himself sweeping powers and mismanaged the economy, taking to the streets in protest and prompting the army move.

Following Morsi's overthrow, the Brotherhood organised rallies demanding his reinstatement, bringing on the fiercest campaign against it by security forces in decades.

The government accuses the Brotherhood of inciting violence and terrorism and has put forward its own plan for new elections. Egypt's state and private media now portray the Brotherhood as a terrorist group and an enemy of the state.