Turkish AK Party court victory is double-edged sword

ISTANBUL (Reuters) - Turkish Prime Minister Tayyip Erdogan and his ruling AK Party have scored a victory in court over hardline secularist foes but they will need to quickly heal divisions to avert another crisis.

The Constitutional Court narrowly voted on Wednesday against closing the AK Party for Islamist activities and instead fined it for undermining the country's secular principles, a warning shot not to cross the state's red lines again.

The verdict against banning a democratically elected party rescued Turkey from political chaos, which would have likely brought a halt to European Union membership talks. A closure would also have hit vital reforms and economic growth.

The turmoil had already wiped several billion dollars off the value of the Istanbul stock exchange and hurt foreign direct investment in Turkey's $700 billion economy.

"It's like a soccer game, you can write every detail about the way the match was played, but at the end of the day what matters is the score and here the AK Party won," said Cengiz Candar, a leading Turkish columnist and author.

"The important thing is how Erdogan will modify himself and his policies after all that has happened. His speech last night carried optimism that he will be more flexible and engaging and that Turkey must forge ahead on the EU road," he added.

Erdogan said the AK Party, criticized in the past for failing to seek consensus on deeply divisive issues, would undertake its responsibility to prevent a recurrence of past events and embrace all Turks. He urged others to do the same.

The court challenge was the latest salvo in a decades-old battle between a powerful secularist elite, which has traditionally controlled Turkey's key institutions, and popular religious-leaning parties, today in the shape of the AK Party.

The case was sparked by a government-led reform to lift a ban on students wearing the Muslim headscarf at university. The elite, including army generals and judges, see the garment as a symbol of political Islam and a sign that the AK Party wants to move Turkey towards a more observant Muslim society.

The court case ensures that any relaxation of religious practice in public has been put on hold indefinitely, including the headscarf reform -- a victory for hardline secularists.

SIGH OF RELIEF

Turkey has stumbled from one political crisis to the next over the past few years, each time further polarizing the country between secular Turks, backed by generals and judges distrustful of the current government, and increasingly prosperous pious Muslims who are the backbone of the AK Party.

Each side claimed victory in Wednesday's ruling. Erdogan said it was a win for democracy, while opposition leaders said it had taught the government a lesson not to seek confrontation.

Key to Erdogan's success will be whether the man known for his combative and autocratic style of leadership will begin to engage in compromise politics, a rare notion in Turkey, and thus disarm hardline secularists of their greatest weapon in portraying him as a divisive Islamist.

"If Prime Minister Erdogan can learn a few lessons from the Constitutional Court verdict, the political polarization and divisions which have prevailed in the country in the last year may begin to dissolve," said Hasan Cemal, a columnist at liberal newspaper Milliyet.

Erdogan will need to move fast to make up for the lost time the party devoted to defending itself in court and pursuing controversial policies, which forced the government onto the defensive and steered it from its reformist path.

Many Turks felt let down by Erdogan's failure to live up to his election promises in 2007 to bring his party to the centre ground of Turkish politics and carry out democratic and economic reforms, including some required to join the EU.

The case has revealed the flaws in the Turkish democratic system. Being able to shut down a democratically elected party on charges of undermining secular principles of a predominantly Muslim country has angered many in Turkey and abroad.

Even the Constitutional Court, seen as one of the last lines of defence for the elite, said it felt uncomfortable having to rule on banning a governing party and called for reforms to political party laws.

SECULARIST SETBACK

Critics viewed the court challenge as a "judiciary coup" attempt by hardline secularists to remove Erdogan, Turkey's most popular politician, from power and crush his party.

Opponents threw him in jail in 1999 for reading a Islamist poem and scuppered his chances of becoming president in 2007.

Last year the military failed to stop the ruling party from electing former Islamist Abdullah Gul as president.

Turkey has had four military coups in the last 50 years.

"I hope this verdict paves the way for governments to be checked by the normal, usual means of democracy," Sahin Alpay, a politics professor at Istanbul's Bahcesehir University, wrote in religious-leaning newspaper Zaman.

And a widening probe into a shadowy, ultra-nationalist organization, called Ergenekon, suspected of plotting assassinations and violence to spark a military coup has forced the military onto the defensive for the first time in years.

Two senior retired generals have been arrested in connection with Ergenekon and lower rank former army officers are already indicted on charges of seeking to overthrow the government.

"Those (including military) who want Erdogan out of politics and the AK Party banned will not give up because of yesterday's verdict," Candar said.

"But Ergenekon provides leverage to Erdogan and diminishes the former standing of the military as an institution and spokesman of (hardline) secularists against the government."

(Editing by Mary Gabriel)