The ruling will leave the leaders of Catalonia’s biggest secessionist groups behind bars during campaigning for the December 21 election.
A new regional election will be held in Catalonia on December 21.
Catalan President Carles Puigdemont rejected Madrid’s decision, to be implemented this week, and thousands of pro-independence protesters marched in Barcelona on Saturday.
The main opposition said on Friday they would back special measures to impose central rule on the region to thwart the secessionist-minded Catalan government.
The Catalan government accused Madrid of taking “political prisoners” and thousands of protesters gathered along Barcelona’s Diagonal Avenue to call for their release.
Spain’s Rajoy would probably call a snap regional election after activating Article 155 of the constitution that would allow him to sack the Catalan regional government.
European leaders have either taken a neutral stance, relegating the conflict to an internal matter for Spain to resolve, or have offered support to the Spanish government.
The EU has shown no interest in an independent Catalonia, despite an appeal by Puigdemont for Brussels to mediate in the crisis.
In Madrid, some socialists have suggested Basque could serve as a model for a compromise that would defuse Spain’s biggest political crisis since a failed coup in 1981.
Spanish PM Rajoy has remained vague on whether he would use article 155, the nuclear option of the constitution which enables him to sack the regional government.
Mireia Boya, a Catalan lawmaker said a declaration of independence would follow a parliamentary session on Monday to evaluate the results of the October 1.