Turkey graft probe blocked as defiant PM digs in

A graft probe that has shaken Turkey's government to its core and threatened Prime Minister Recep Tayyip Erdogan's rule has been blocked, a prosecutor alleged Thursday.

Protesters hold up their fists during a demonstration against corruption in the Kadikoy district of Istanbul on December 25, 2013

"Clear pressure" from Istanbul's chief prosecutor and police commanders have stymied further arrests in the investigation, which has already netted several high-profile political and business figures suspected of bribery and corruption, state prosecutor Muammer Akkas said in a statement.

His charge came the day after Erdogan reshuffled nearly half his cabinet following the resignation of his interior, economy and environment ministers, all of whose sons have been implicated in the scandal.

The outgoing environment minister, Erdogan Bayraktar told NTV television he had been pressured to quit, and stated "I believe the prime minister should also resign".

The premier, though, appears determined to weather the storm, even as it inches closer to his inner circle and family.

He has claimed the probe was launched by a shadowy international cabal, and has ordered the sacking of dozens of police officers involved in carrying it out.

But many observers see the developments as a grievous blow to his 11-year reign, during which he has built a reputation as a formidable economic steward but also an autocratic leader.

On Thursday, the Turkish lira dived to a new record low on the developments. The Istanbul stock market has also taken a beating.

The opposition Cumhuriyet daily predicted an "earthquake" would ensue as investigators turned their attention to a non-governmental organisation connected to the premier's son Bilal.

The paper said prosecutors were pressuring police to investigate construction tenders granted to the NGO by an Istanbul municipality, whose mayor has been implicated in the corruption scandal.

The mayor, a member of Erdogan's Islamic-rooted Justice and Development Party (AKP), was briefly detained last week but later released pending trial.

Akkas said in his statement Thursday that Turkey's public "should be aware that I, as public prosecutor, have been prevented from launching an investigation".

On Wednesday he was reported to have ordered the detention of 30 more suspects in the case, including ruling party lawmakers and businessmen.

Akkas said police chiefs were acting illegally by disobeying court orders furthering the probe.

But Istanbul chief public prosecutor Turan Colakkadi hit back at Akkas's charges by saying prosecutors were not mandated to launch "random investigations".

Colakkadi also claimed Akkas was removed from the investigation because he had mishandled the proceedings and had leaked information to the media.

The internal row did not look likely to stop there.

Turkey's Higher Board of Judges and Prosecutors is backing Akkas. It says police are required to obey his orders.

Political observers have linked the bribery probe to tensions between Erdogan and one of his most powerful former allies: Fethullah Gulen, an influential Muslim cleric who lives in the United States but whose followers hold key positions in Turkey's police and judiciary.

The Turkish premier says he is fighting against a "state within a state", widely seen as a reference to the influential Gulenist movement, a key backer of his government when he first came to power in 2002.

Gulenists have their own media, universities, think-tanks, and businesses, and with their followers in key positions, analysts say, the movement appears to be the only force that can undermine Erdogan's party in the run up to local polls in March.

"There is not even a little sign of a ceasefire, let alone peace," columnist Rusen Cakir wrote in the Vatan daily on Thursday. "To the contrary, it appears the battle (between Erdogan and Gulen) will turn even more violent."

"It is obvious that the (Gulen) movement have more tricks up their sleeve," he added.