Turkey removes some 350 police officers

The officers were sacked by a government decree published at midnight and included chiefs of the financial crimes, anti-smuggling, cyber crime and organised crime units, the private Dogan News Agency reported.

The move comes as the government is trying to contain the massive political fallout from the graft probe that has become the biggest threat to Erdogan's 11-year rule ahead of local elections in March.

The turmoil has added to pressures on the already volatile economy, with the national currency plunging to all-time lows as investors become spooked.

Erdogan has branded the investigation a "dirty" plot to try to topple his government, blaming supporters of a powerful exiled Muslim cleric who wields considerable influence in the judiciary.

Dozens of leading businessmen and political figures -- including the sons of three ministers -- were rounded up in a massive sweep in Ankara and Istanbul in December.

The once-unassailable Turkish strongman responded by sacking hundreds of police officials across the country, including the powerful Istanbul police chief.

Erdogan's critics accuse him of desperately trying to protect his cronies, and the appointment of Selami Altinok, a little-known governor with no background in police work, as Istanbul's new police chief was further seen as an attempt to shut down the investigation.

With the latest round of dismissals, the total number of police officers removed from their posts has risen to 560 in Ankara alone, according to media reports.

Prominent prosecutor Muammer Akkas was also barred last month from expanding the investigation -- which could also reportedly target Erdogan's son Bilal -- over allegations he leaked information to the media.

Probe of claims raids were blocked

The probe has thrown the spotlight on a bitter feud between Erdogan's government and followers of influential Muslim scholar Fethullah Gulen, who has lived in US exile since 1999.

The so-called Gulenists -- once staunch supporters of Erdogan's Justice and Development Party (AKP) -- hold key positions in various government branches including the police and judiciary.

Turkey's Supreme Board of Judges and Prosecutors (HSYK), which appoints senior members of the judiciary, decided Tuesday to investigate allegations that the new Istanbul police chief was blocking prosecutors from carrying out further arrests, NTV television reported.

The corruption crisis erupted on December 17 when police arrested dozens of people including sons of former ministers and the chief executive of Turkey's state-run Halkbank.

They are suspected of numerous offences including bribery for construction projects and illicit money transfers to sanctions-hit Iran.

Police have conducted further raids in five cities and detained 25 people on suspicion of bribery and fraud in tenders for construction projects, including civil servants from the Turkish rail authority TCDD and the western port of Izmir, local media said.

Erdogan has vowed to battle "a state within a state", apparently referring to Gulenists in the state apparatus.

Gulen has denied any involvement in the controversial inquiry.

His followers were key backers of the AKP when it came to power in 2002 but tensions emerged over last year's anti-government protests and government plans to shut down a network of private schools run by the Gulen movement.

Erdogan said Sunday he would favour retrials for hundreds of military officers jailed for alleged coups plots against his government, a stance interpreted as a bid to win army support against Gulen's Hizmet (Service) movement.

Pro-government media claimed at the weekend that an Istanbul prosecutor in charge of the so-called "Ergenekon" trial against the military had a $35,000 vacation at a five-star Dubai hotel paid for by a Turkish construction company.

The company, one of those targeted in the graft probe, said its Dubai office had covered the expenses but the prosecutor Zekeriya Oz said he paid the bill himself.

The Ergenekon trial saw scores of army officers including former chief of staff Ilker Basbug jailed on charges of attempting to topple Erdogan's Islamic-leaning government.

The graft probe has also exposed bitter fault lines in Erdogan's traditional power base and prompted calls from both his own party and the opposition for the resignation of the entire government.

The European Union, which Turkey has long sought to join, has urged the authorities to address the graft allegations in an "impartial manner".

As Turkey's financial markets remained jittery, Fitch ratings agency warned Tuesday that although it maintained its sovereign credit rating at BBB-, the economy remained vulnerable.