* Erdogan to be inaugurated as head of state on Aug. 28
* Has to break ties with ruling party as president
* AK Party unity key to his ambition for stronger presidency
By Orhan Coskun and Gulsen Solaker
ANKARA, Aug 15 Turkish president-elect Tayyip Erdogan will reshuffle the upper echelons of his ruling party in the coming weeks, in a bid to snuff out rumblings of division and maintain his grip on the political movement he forged more than decade ago.
Erdogan will step down as leader of the AK Party when he is inaugurated as head of state on Aug. 28, as required by the constitution, but he is determined to ensure it remains united and loyal before he does so, senior party officials say.
The wrangling at the heart of Turkey's biggest political movement means political uncertainty is likely to persist at least into the middle of next year, when parliamentary elections are due, credit ratings agency Moody's warned on Friday.
Erdogan co-founded the AK party as a coalition of conservative religious Muslims, nationalists and reforming centre-right elements in 2001. At polls a year later, it routed established parties tainted by economic mismanagement and graft accusations. The opposition, bereft of effective leadership, has yet to recover.
Under Erdogan, the party has overseen a period of unprecedented stability and growth after an era of unstable coalition governments and economic crises. But fault lines are emerging, the old centre-right influence yielding to a more rancorous, socially conservative tone. Some in Turkey question how well it can hold together after his departure.
"Even if he's not in the party, Erdogan will establish a structure that will show strength on his behalf and not result in fragmentation," one senior official in Ankara said.
The party's Central Executive Board - its top decision making committee - would be reshuffled to ensure loyalists are in key positions, though the announcement would be made by the new prime minister once Erdogan had become president and his party ties cut.
Though AK's success is largely built on Erdogan's personal popularity, he knows he needs the party as much as it needs him.
The AK party must win a stronger majority in parliament in a general election due by next June if he is to secure his ambition of changing the constitution and establishing an executive presidency.
His opponents fear such a move will usher in an increasingly authoritarian state under Erdogan, whose roots in Islamist politics and intolerance of dissent they fear is taking Turkey further from the secular ideals which have shaped politics since Mustafa Kemal Ataturk founded the modern republic in 1923.
There are already signs of tension within AK between younger Erdogan loyalists, including top aide Yalcin Akdogan, and a more consensus-driven faction sympathetic to incumbent President Abdullah Gul, a co-founder of the party said to be more sceptical about shifting to a presidential system.
"We are on the side of the 'New Turkey' ideal and Erdogan. This movement has no debts owed to anyone," Akdogan wrote in a recent column in the Yeni Safak newspaper, words taken as warning to the old guard in the party.
Erdogan insists AK should maintain a three-term limit for its members of parliament, a rule that will see a raft of senior figures including some of Gul's allies stand down in June.
"Those who are trying to see these people as defective goods should be careful," deputy prime minister Bulent Arinc, seen as an ally of Gul's and himself serving a third term, told reporters in the weeks ahead of the presidential election.
"Nobody who has made this party what it is, is defective."
The Gul camp fears a rush to an executive presidency could erode remaining checks and balances on the power of one man.
Erdogan has already undermined the judiciary by purging it in response to a graft investigation that impinged on government and that he portrayed as an attempted coup. Where as prime minister his legislation was always open to presidential veto, in his new more powerful position he would face no such check.
Gul supporters also favour a more balanced foreign policy, concerned as much with advancing Turkey's EU process and maintaining strong relations with Washington as with playing a more assertive role in the Middle East.
Gul this week signalled a return to politics, saying he would play a role in the AKP after his term expires; but even those sympathetic to him say he is a consensus builder who would seek to resolve any tensions internally and would not seek to form any sort of rival party.
"There aren't clear subjects that they disagree on, it's just the nuances and differences in interpretation. There won't be a separation, a break between Erdogan and Gul," said Huseyin Yayman, a columnist and political science professor at Ankara's Gazi University.
Erdogan also dismissed suggestions on Thursday, the 13th anniversary of AK's foundation, that the party could crumble without him.
"You know there are those who can't wait to sow discord... within the party," he said. "Let us not fall into this trap. Let us not gratify those who want the AK Party to stumble."
Changing the constitution and presidential powers without a referendum requires a two thirds majority, a feat the party could struggle to achieve, particularly without the Erdogan podium speeches that have driven its success in past elections.
AK holds 313 of parliament's 550 seats, a strong majority but below the crucial two thirds threshold. Erdogan took just under 52 percent of the vote in the presidential poll, while his party won 43 percent in municipal polls in March 30.
"It seems to me that the popularity of the AK party has peaked, and from now on there is very little additional vote they can get," said Sinan Ulgen, head of the Istanbul-based Centre for Economic and Foreign Policy Studies.
Erdogan's policy of rallying his core conservative voters with polarising rhetoric, while alienating liberal opponents, had served him well until now but would make it difficult for the AK to increase its share of the national vote, he said.
"It is going to be extremely difficult for AK Party to get any sort of constitutional majority in the 2015 elections against this background."
Erdogan said he expects to announce his future prime minister and the new AK leader as early as next Thursday, after a meeting of the party's executive committee.
Foreign Minister Ahmet Davutoglu, who has strong support within the party bureaucracy and has been Erdogan's right-hand man internationally, is the top choice, though former transport minister Binali Yildirim is also positioning himself.
"After the prime minister becomes president, I don't expect any weaknesses in the party," AK deputy chairman Mustafa Sentop told Reuters. "There are some arguments taking place in the public arena ... but I see these as normal. This is, after all, the biggest political movement in Turkey." (Additional reporting Nick Tattersall, Asli Kandemir and Selin Bucak; Writing by Nick Tattersall; editing by Ralph Boulton)