By Andrés González and Elisabeth O'Leary

MADRID (Reuters) - Spain's Constitutional Court blocked Catalonia's attempted secession process on Wednesday by agreeing to hear a Spanish government appeal against it, deepening a stand-off over the potential breakaway.

Catalonia's regional parliament passed a resolution this week setting out a plan to establish a republic within 18 months in the highly industrialized and populous northeastern region which accounts for about a fifth of Spain's economic output.

"This is a warning to (Catalan leaders) that if they fail to comply with the suspension, they may commit disobedience," read the ruling by the Madrid-based high court.

As Catalan leaders elected in September have specifically vowed to ignore the rulings of the Constitutional Court, it is unclear what the next move in the confrontation could be.

The row over Catalonia has escalated dramatically weeks ahead of a national election in December, dominating political campaigning as parties such as Prime Minister Mariano Rajoy's center-right People's Party (PP) call for Spanish unity.

Strikingly, it has relegated discussion of the economy to a secondary role, even though years in or near recession before 2014 have left one in five Spanish workers unemployed.

"The will of the Catalan people cannot be suspended. We are committed to continue with our democratic mandate," the leader of one of the Catalan independence parties, Oriol Junqueras, said on his official Twitter feed.

Earlier on Wednesday, Rajoy said the region would not be allowed to split from Spain. "It's not just a reaction to a motion passed in parliament, this is about defending a whole country," the prime minister told a news conference.

"This is blatant disregard for the state's institutions. They are trying to do away with democracy. I will not allow it."

LANGUAGE AND CULTURE

With its own language and distinctive culture, Catalonia was once a big textile producer and is now trying to reinvent itself as a technology hub. Its Mediterranean beaches and art-rich capital Barcelona already draw in huge revenues from tourism.

Separatist feeling has been fueled by demands for greater recognition of Catalonia's cultural identity, dismissed by the central state, and demands for a referendum.

Opponents to a Catalan breakaway argue that many other Spanish regions also have a distinct identity and language, and that conceding to one would open a Pandora's box of nationalist demands across Spain.

The Constitutional Court's decision to hear Madrid's appeal means the Catalan assembly's resolution, which calls for state institutions such as a tax office to be set up in preparation for independence, will be suspended for several months.

If assembly members fail to take the decision into account, they could be suspended from their posts and face legal action, the court warned. Rajoy has also vowed to take more steps if needed against local representatives pressing for secession.

Parties favoring a split from Spain won a majority of seats in the Catalan parliament in September, although they fell just short of half of the vote.

Artur Mas, who ran the Catalan government during years of economic crisis that saw the independence movement swell, is acting regional head but leadership squabbles in the pro-secession camp have left him fighting for political survival.

Mas lost a Catalan assembly vote on Tuesday to be reinstated as regional president, though further rounds of voting will be held this week.

(Reporting by Andres Gonzalez; Writing by Sarah White and Elisabeth O'Leary; Editing by Catherine Evans)