By Orhan Coskun
ANKARA (Reuters) - Two senior figures in Turkish President’s Tayyip Erdogan's ruling party are planning to launch a rival political group this year, people familiar with the matter said, a move that could further erode support for the country’s long-time leader on the heels of a stinging electoral defeat in Istanbul.
Behind the breakaway plans are former deputy prime minister Ali Babacan and former president Abdullah Gul, both founding members of Erdogan's AK Party (AKP), according to two political advisers.
Sunday's re-run mayoral election delivered the second loss in recent months for the AK Party (AKP) in Turkey’s largest city, a bitter setback for the president who has ruled for 16 years. It has also emboldened critics within his own party who have for years hinted at plans to form a rival party because of dissatisfaction over Erdogan’s increasing powers over the party and government.
With economic recession, unemployment and inflation hurting Turkish voters and eating into the AKP's support base, any further erosion - even just a few percentage points of voter support – could be deeply damaging for the party, which already relies on an alliance with nationalists for its parliamentary majority.
"Babacan and Gul will most likely form the party in the fall," said one of the advisers, who is close to Babacan.
The new party’s policies would mirror the early years of the AKP, the adviser added. When the AKP was launched in 2001, it blended an Islamist-rooted outlook with a pro-Western, democratic and liberate market approach which enjoyed broad popular backing.
The two men have been considering establishing the party for around six months, but the process has been given momentum by the AKP’s loss of Turkey’s main cities in the March 31 municipal elections, said the other adviser, who is familiar with the plans for the new party.
He did not say how the party would be funded but said the preparation so far had included meetings with current AKP parliamentarians, other politicians and academics.
Neither Babacan nor Gul could be reached for comment.
The politicians haven't publicly commented on the plans, but Gul broke ranks with the AKP last month to signal his discontent at the decision to annul the initial opposition victory in Istanbul after a series of appeals from Erdogan's party.
In a tweet, he compared the decision to re-run the election to a 2007 constitutional court ruling raising the number of parliamentarians required to approve a new president - which was viewed as an attempt to obstruct his path to the presidency.
Babacan served as economy and foreign minister in the first years of AKP government before becoming deputy prime minister, a role he held from 2009 to 2015. Gul was president from 2007 until 2014, when then-prime minister Erdogan moved to the presidency.
An AKP official, who asked not to be named, said the party was aware of the plan to launch a rival group.
“Babacan is a strong and respected figure. Of course, the AK Party will be affected by the new party, but we are able to lose some AK Party supporters like some other parties," the official said.
He added that the party must accept responsibility for the election results. "We need to return to a policy where we can govern the state, but still be with the people."
There are many precedents for new parties in Turkey, including two years ago when disgruntled members of the nationalist MHP party broke away to form the Iyi (Good) Party. It won 10% of the vote in last year’s parliamentary election.
The adviser close to Babacan said there was support from AKP members of parliament for the breakaway group, without specifying how many.
He added that he expected "a few surprising important supporters," but didn’t provide names.
If a new party is established, it could lead to more resignations and defections from the AKP, breaking its hold over a large swathe of pious and conservative voters, said Galip Dalay, a visiting scholar at Oxford University.
"The AKP's monopoly over the conservative sector of society will be broken," he said.
One prominent AKP figure, former prime minister Ahmet Davutoglu, has been openly critical of the party, slamming government economic policies, media restrictions and the damage he said had been inflicted on Turkish institutions.
A source close to Davutoglu said he was planning a ‘new step,’ but provided no details beyond saying the politician did not plan to join Gul and Babacan for now.
Erdogan has recovered from setbacks before. In June 2015 his party failed to win an outright parliamentary majority, leading to months of stalemate before it regained a majority in another election just five months later.
A relentless and driven campaigner, he has been at the heart of more than a dozen successful elections. But AKP officials have privately criticized the way the party approached both the March 31 and June 23 elections.
Erdogan campaigned for weeks ahead of the March local elections, delivering up to eight combative speeches a day. He accused opponents, including the pro-Kurdish Peoples’ Democratic Party (HDP), of links to terrorism and said the vote was a matter of survival.
The HDP denies any links to terrorism.
That failed to stop the AKP losing in the capital Ankara and Istanbul during the country-wide local elections in March, leading some senior party members to say that the tone of the campaign had put off many voters who were more concerned with the cost of living and supply of local services.
Ahead of Sunday's re-run vote in Istanbul, the AKP tried to win over Kurdish voters with a less confrontational campaign, only to find that the change of tack had angered some supporters of its nationalist ally, the Nationalist Movement Party (MHP).
The AKP's conflicting efforts to win over mutually hostile Kurdish and nationalist Turkish voters partly reflect Erdogan's narrowing political options after a decade and a half in power.
Erdogan, speaking to party members in parliament on Tuesday, defended his government's record and said the AKP had helped Turkey to "rise and grow" - a reference to years of economic dynamism before last year's financial crisis and recession.
"We will evaluate why we were unable to win the June 23 Istanbul elections. We will identify shortcomings...and aim to amend these," he said. "We will continue to work to be worthy of our people's love and respect."
(Additional reporting by Jonathan Spicer; Editing by Dominic Evans and Cassell Bryan-Low)
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