Factbox: Possible outcomes in Turkey's parliamentary election

ISTANBUL (Reuters) - Turkey holds a parliamentary election on June 7 that could reshape its political system and determine the future of President Tayyip Erdogan, its most popular - and divisive - modern leader.

Erdogan is hoping the ruling AK Party he founded will win at least two-thirds of the 550 seats in the assembly, allowing it to change the constitution and create a strong executive presidency.

Under the current constitution, the Turkish president’s role is largely ceremonial, though opposition leaders accuse Erdogan of overstepping the limits of his office and breaching his constitutionally mandated political neutrality.

Recent opinion polls suggest the AKP is likely to fall well short of a two-thirds majority and could even fail to win the 276 seats required for a simple majority.

The election is also crucial for the pro-Kurdish Peoples’ Democratic Party (HDP), which is hoping to pass the 10 percent threshold required to enter parliament. Previously, Kurdish opposition candidates ran as independents to skirt the rule.

Here are the main scenarios for election outcomes:

1. AKP takes a simple majority (276-329 seats)

Seen as the most positive scenario for financial markets, this would ensure continuity without giving the AKP enough seats to broaden Erdogan’s power.

Some analysts say a chastened AKP would be more likely to focus on bolstering an economy that has stalled after years of rapid growth. This scenario could possibly see the HDP crossing the 10 percent threshold and picking up around 50 seats.

In this scenario, the plans for an executive presidency would need to be put to a referendum with the support of at least one opposition party, something the government would be expected to work towards.

In the meantime, Erdogan would be likely to continue to exercise influence over daily politics with a team of advisers, some of them drawn from the current cabinet.

2. AKP forced into a coalition (fewer than 276 seats)

Recent polls have suggested a coalition is a distinct possibility, particularly if the HDP polls above the 10 percent threshold. This has unnerved investors and renewed pressure on the lira currency after a rally last month.

The right-wing Nationalist Movement Party (MHP) is seen as the most likely coalition partner. Leaders of both the HDP and the staunchly secularist main opposition Republican People’s Party (CHP) have separately told Reuters they would be unlikely to form a government with the centre-right, Islamist-rooted AKP.

3. AKP gets a sweeping victory (330 or more seats)

This scenario is the one favored by Erdogan, but seen as unlikely due to lackluster opinion polls.

Winning 330 seats would give the party the three-fifths majority required for a referendum to change the constitution. A two-thirds majority of 367 seats would allow it to change the constitution without a referendum.

Sources: Grand National Assembly of Turkey, Reuters

Reporting by David Dolan; Editing by Nick Tattersall and Gareth Jones