Two Turkey ministers resign over graft probe

ANKARA (AFP) - Two Turkish ministers stepped down Wednesday, the first heads to roll over a massive graft probe that has presented Prime Minister Recep Tayyip Erdogan with the biggest challenge to his 11 years in power.

Economy Minister Zafer Caglayan and Interior Minister Muammer Guler announced their resignations just hours after Erdogan returned from a trip abroad, expected to reshuffle his cabinet.

The sons of both ministers are among the two dozen people who have been charged as part of a high-level bribery and corruption probe that has ensnared close government allies and top businessmen.

Erdogan, who has led Turkey since 2002 as the head of a conservative Islamic-leaning government, has described the probe as "a smear campaign" to undermine Turkey's ambitions to become a major political and economic power.

The political tensions have hit the already slowing Turkish economy, pushing the national currency to hover record lows against the US dollar.

Erdogan has responded to the investigation by sacking dozens of police chiefs.

"We will be patient. We will not fall into traps," Erdogan told thousands of supporters who flocked to the Ankara airport late Tuesday to greet him on his return from an official visit to Pakistan.

The Turkish premier held a midnight summit at his Ankara home with some of his ministers including Guler, local media reported.

Caglayan kept up the government's defiance in Wednesday's resignation statement, declaring that the investigation was "clearly a hideous plot against our government, our party and our country." "I am stepping down from my post as economy minister so that this ugly game targeting my close colleagues and my son will be spoiled and the truth will be revealed," Caglayan said.

Guler, the interior minister, simply told the state-run Anatolia news agency that "I offered my resignation to the prime minister on December 17 and today I conveyed it in writing."

President Abdullah Gul said Tuesday that Erdogan would reshuffle his cabinet following his return from Pakistan.

"We have held long talks with the prime minister on ministers... He is making preparations and evaluations," Gul said.

The fast-moving police enquiry has struck at the heart of Turkey's ruling political elite, as well as the chief executive of state-lender Halkbank, rattling Erdogan's AKP government which weathered mass street protests in June.

The son of Environment Minister Erdogan Bayraktar, construction tycoon Ali Agaoglu, and the mayor of Istanbul's conservative Fatih municipality, Mustafa Demir, were released pending trial as part of the wide-scale probe.

Observers say the wide-ranging investigation has exposed a rift between Erdogan's Justice and Development Party (AKP) government and Fethullah Gulen, a hugely influential Muslim cleric who lives in the United States and whose movement wields considerable influence in Turkey's police and judiciary.

Cracks have emerged between Erdogan and the Gulen movement over a number of issues including the role of Turkey's spy agency chief Hakan Fidan but the dispute has burst into the public view after government plans to shut down a network of Gulenist schools, a major source of revenue for the group.

The scandal has erupted three months before Turkey's local elections on March 30 that will include a contest for the control of Turkey's largest city Istanbul and which are now being seen as a key indicator of where the political fault-lines lie throughout the country.

The stakes are high for Erdogan. Fast in the tracks of the local polls are presidential elections in August, which for the first time will be open to all voters and in which the still popular premier is expected to participate.