ISTANBUL (AFP) - Turkey's powerful intelligence chief, one of the most steadfast allies of President Recep Tayyip Erdogan, has resigned to stand for election as a lawmaker in upcoming elections, the official Anatolia news agency said Saturday.

The resignation of Hakan Fidan, who has headed the National Intelligence Agency (MIT) since 2010, could herald a major reshuffle of the Turkish government after June 7 legislative elections.

Turkey's press have in recent days speculated feverishly that Fidan's standing as an MP would set him up to become the new foreign minister, a move that would give a higher profile to Turkish diplomacy.

His resignation has been accepted by Prime Minister Ahmet Davutoglu and will take effect on Tuesday, Anatolia added.

The move came after Fidan, believed to be in his late 40s and formerly and advisor to Erdogan, held several hours of closed door meetings with Erdogan and Davutoglu in Ankara last week.

Up until the election, Fidan will work as an advisor to Davutoglu, the Radikal online daily said.

Marc Pierini, visiting scholar at the Carnegie Centre, said Fidan could boast links with the president, a powerful past as head of MIT and also sheer name recognition.

" Hakan Fidan, if elected, will rank among the very top names of the ruling party in the new legislature and will be part of the closest circle of power," he told AFP.

'BOLD AND BRAVE'

Davutoglu had in a television interview last week lavished praise on Fidan, describing him as "brave and bold and not going back once a step is taken."

Seen only occasionally in public and rarely making public comments, Fidan has emerged as one of the most powerful men in Turkey under Erdogan.

As head of the MIT, he has led negotiations with Kurdish militants for an end to a decades-long insurgency and has been a key player in Turkey's policy on the Syria crisis.

He was also instrumental in controversial talks that secured the release in September of almost 50 Turkish diplomats, staff and their families who were kidnapped by Islamic State in Iraq and Syria (ISIS) militants at the Turkish consulate in Mosul in Iraq.

They were reportedly released in exchange for militant prisoners but the details have remained unclear due to a media blackout typical of Fidan's behaviour.

A Turkish prosecutor sought to summon him in February 2012 for holding secret talks with Kurdish militants in Oslo, an episode that started Erdogan's long running battle with US-based preacher Fethullah Gulen.

'MIT SUPERMAN'

Under Turkish law, state officials wishing to stand in the elections must resign their posts by Feb 10.

The election is seen as a critical moment in Turkish modern political history, with Erdogan seeking a crushing majority for the ruling Justice and Development Party (AKP) that he co-founded.

This would allow the AKP to change the constitution to give Erdogan, who became president in August after over a decade as premier, sweeping new powers as head of state.

Erdogan said on Friday that he wanted 400 supportive lawmakers in the 550-MP parliament to create the "new Turkey" that he plans.

Under Fidan's leadership, the MIT has become one of the most powerful institutions in the country, although its work is unsurprisingly shrouded in mystery.

In a curious sign of dissent at the move, Deputy Prime Minister Bulent Arinc questioned the need for Fidan to leave the MIT, saying he had been doing the work of a "superman".

"Personally, I think seeing a person, who was assigned the duty of superman, entering the parliament to become an MP is a waste," he told the CNN-Turk television channel, quoted by Anatolia.

Should Fidan become foreign minister, it is likely the post would gain far greater prominence than it has under incumbent Mevlut Cavusoglu, something that could trouble the West at a time of prickly ties with Ankara.

But Pierini of the Carnegie Centre cautioned: "It is too early to say if his eventual presence in a future government will have a decisive influence on Turkey's foreign policy."