NEW DELHI (AFP) - India's top court granted bail on Friday to a powerful south Indian film star turned politician jailed last month for corruption, sparking jubilation in her home state.

Jayalalithaa Jayaram, a 66-year-old former film star and a long-time head of Tamil Nadu, was convicted last month of having assets vastly exceeding her income in a case that had dragged on for nearly two decades, and sentenced to four years' jail.

The Supreme Court in New Delhi ruled that Jayalalithaa, known as "Amma" or "mother" to her supporters, could be freed on bail pending an appeal against her conviction. "She has been given conditional bail," senior Indian lawyer Subramanian Swamy, an anti-corruption crusader who waged the case against the politician, told reporters.

Supporters of the hugely popular politician danced joyously, waving their arms and shouting "Amma, Amma" in New Delhi and in her Tamil Nadu home state, after the ruling.

Following her conviction, Jayalalithaa, head of the AIADMK or All India Anna Dravida Munnetra Kazhagam party, had to step down as Tamil Nadu chief minister and was replaced by a loyal political acolyte.

The Supreme Court insisted in exchange for granting Jayalalithaa bail that she appeal to her supporters not to resort to violence over her case.

Many of her supporters staged protests and some even committed suicide in the days after her conviction, the Tamil Nadu police say.

The court also ordered the politician's case be heard swiftly, saying all her appeal papers must be lodged with the Supreme Court by December 18.

It would then direct the appeal court in the southern state of Karnataka to take up the case immediately, saying the case first filed in 1997 had dragged on too long.

The regional leader has garnered huge support with her state-run canteens serving nutritious food at low cost as well as freebies including electric blenders, goats and small amounts of gold.

Court observers said it may take until Saturday for the paperwork to be ready for Jayalalithaa's release from the main jail in Bangalore, capital of Karnataka.

Her case was shifted to Karnataka state to ensure a fair trial.

The lower court also fined Jayalalithaa a massive 1 billion rupees (S$20.6 million) and disqualified her from holding office for illegally amassing wealth - including gold, properties, shoes and saris.

Politicians are rarely convicted of corruption in India despite widespread public anger over endemic graft that permeates every level of life in the country.

Jayalalithaa's AIADMK party emerged as the third biggest force in the national parliament after elections in May.