A former prime minister and close ally of Turkish President Tayyip Erdogan strongly criticised the president's ruling party on Monday for its poor performance in local elections last month.

Ahmet Davutoglu, a high profile figure in Erdogan's Justice and Development Party (AKP), blamed policy changes and an alliance with nationalists for the party's major losses.

"The election results show that alliance politics have caused harm to our party, both in terms of voter levels and the party's identity," Davutoglu said in a 15-page statement.

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The statement may signal a deep divide within the AKP.

In a serious blow to Erdogan, the AKP lost control of the capital Ankara and Turkey's largest city Istanbul in the 31 March elections, as the two cities went to the Republican People's Party (CHP).

Electoral authorities have given the CHP candidates their mandates for the Istanbul and Ankara mayor posts, but the AKP is seeking a rerun of the Istanbul vote, citing irregularities despite two weeks of recounts.

The AKP's losses in Istanbul and Ankara, along with several other cities, represent the biggest electoral blow to the party since it first gained electoral success in 2002.

Davutoglu served as prime minister between 2014 and 2016 before falling out with Erdogan.

In his statement, left-leaning Davutoglu said the AKP's reformist, liberal platform had been replaced in recent years by a more statist, security-based approach that was driven by concerns of preserving the status quo.

He also warned that "scaring global investors necessary to the development of the country is a dead-end," while pointing to recent economic policy decisions that have moved away from free market values.

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The Turkish economy slipped into recession around the end of 2018, as the lira lost 35 percent of its value over the course of the year.

"The main reason for the economic crisis is an administration crisis. Trust in the administration vanishes if economic policy decisions are far from reality," Davutoglu said.

He also warned against corruption in the government's hiring practices and called for more transparent policies based on competence and qualifications, not on personal connections.

In recent years there has been repeated media speculation that top AKP politicians might break away to establish a new political party, but Davutoglu made no mention of such a prospect.

Instead, he stressed the need for reform within: "I call on our party's executives and relevant bodies to assess all these subjects and our future vision sensibly and with cool heads."