ANKARA (Reuters) - Turkey's government said on Wednesday it would revive efforts to change the constitution and expand the powers of the presidency, helping send the lira currency to a record low as investors fretted about renewed political uncertainty.
The stronger presidency long wanted by incumbent Tayyip Erdogan is a deeply divisive issue, with his supporters adamant it will give the nation of 78 million the strong leadership it needs, but opponents afraid of creeping authoritarianism.
The two biggest opposition parties, the secularist Republican People's Party (CHP) and the pro-Kurdish Peoples' Democratic Party (HDP), both oppose ending Turkey's parliamentary system and some opinion polls in the past have shown a majority of Turks also do not want the change.
But Erdogan has ridden a wave of patriotism since an abortive coup failed to oust him on July 15, consolidating both his power and popularity. A poll two weeks after the attempted putsch showed him with two-thirds approval, his highest ever.
"It is a reality that the parliamentary system does not bring solutions to Turkey’s problems," Prime Minister Binali Yildirim, a loyalist whom Erdogan appointed to the job in May, told members of the ruling AK Party in a speech in Ankara.
Devlet Bahceli, whose Nationalist Movement Party (MHP) has 40 seats in parliament, broke with past rhetoric on Tuesday to tell his party he would not oppose the plan now because it would "strengthen the current system".
"Bahceli has seen that removing the system's blockage is a necessity and his statements pave the way, which is heartening," Yildirim said, vowing to work closely with Erdogan on a draft.
Any constitutional change requires the support of at least 367 deputies in the 550-seat assembly to pass directly. The AKP has 317 seats, while the MHP has 40. The reform would go to a referendum if its gets support of 330 lawmakers.
The AK Party will request meetings with all parties on the issue and wants swift results, Bulent Turan, a senior AKP official, told a news conference in parliament.
Investors are concerned that any renewed uncertainty over Turkey's political system would come at a bad time, with market nerves already on edge over Turkey's growing military involvement in neighboring Syria and Iraq.
"At a time when regional risks are running so high, and a potential military operation into (Iraq's) Mosul is being discussed, the last thing Turkey needs is a dispute over the executive presidential system," said one Istanbul-based banker.
The lira weakened as far as 3.0974 to the dollar after Yildirim's comments before edging back to 3.0940 by 9.15 a.m. ET. It hit its previous record low on July 20, five days after the failed coup.
A state of emergency imposed in July to root out coup plotters from the security and civil services has allowed the government to rule by decree, heightening opposition concern about growing authoritarianism.
Parliament on Tuesday voted to prolong the emergency rule by a further three months in a vote that was a formality, because of the AKP's strong majority and MHP support for the measure.
Some of Turkey's Western allies have raised concerns that innocent people may have been swept up in the post-coup crackdown, which has seen 32,000 people jailed and 100,000 military officers, police, teachers, judges and civil servants sacked.
Arrest warrants were issued on Wednesday for 215 more police officers, including 147 police chiefs, in the third such wave of detentions in the force since last week.
Officials say the crackdown is justified by the gravity of events on July 15, when rogue soldiers commandeered tanks and fighter jets and killed more than 240 people.
Writing by Ayla Jean Yackley and Nick Tattersall; Editing by Daren Butler and Dominic Evans