* Teenager's death sparks unrest in cities across Turkey
* Tens of thousands gather for funeral in Istanbul
* Erdogan still seen prevailing at elections (Adds Erdogan, voxpop, police intervention)
By Dasha Afanasieva
ISTANBUL, March 12 (Reuters) - Tens of thousands of mourners chanting anti-government slogans marched through central Istanbul on Wednesday for the funeral of a teenager wounded in street protests last summer whose death has sparked renewed unrest across Turkey.
Riot police fired water cannon and tear gas at protests in several cities after Berkin Elvan's death on Tuesday, adding to pre-election woes for Prime Minister Tayyip Erdogan as he battles a corruption scandal that has become one of the biggest challenges of his decade in power.
Crowds chanting "Tayyip! Killer!" and "Everywhere is Berkin, everywhere is resistance" held up photos of Elvan outside a "cemevi", an Alevi place of worship, in Istanbul's working class Okmeydani district, from where his coffin, draped in red and covered in flowers, was carried through the streets for burial.
Alevis are a religious minority in mainly Sunni Muslim Turkey who espouse a liberal version of Islam and have often been at odds with Erdogan's Islamist-rooted government.
Police in the capital Ankara fired tear gas to disperse several thousand protesters in the central Kizilay square, and there were also clashes in the poor Alevi neighbourhood of Tuzlucayir across the city.
Erdogan, on the campaign trail ahead of municipal elections on March 30, addressed a rally in the southeastern city of Siirt but failed to mention the teenager's death in a speech of almost an hour.
Referring to last summer's protests, he accused a coalition of "anarchists, terrorists and vandals" as well as the opposition and followers of an influential U.S.-based Islamic cleric of stoking trouble on the streets to undermine him.
"Don't worry we will hold them to account. You will hold them to account at the ballot box on March 30," he thundered.
Anger at the perceived growing authoritarianism of Erdogan motivated many attending the funeral procession in Istanbul.
"The lack of compassion, the polarising attitude of the prime minister and the fact that he behaves like an autocrat is what brought us here," said Emre, 32, marching with his father-in-law.
The funeral ceremony was broadcast live on major television news channels, some of which were criticised for their scant coverage of last June's unrest.
Elvan, then aged 14, got caught up in street battles in Istanbul between police and protesters on June 16 while going to buy bread for his family. He became a rallying point for government opponents, who held vigils at the Istanbul hospital where he lay in intensive care from a head trauma believed to have been caused by a police tear gas canister.
His death has sparked the most extensive street protests since last June, with skirmishes on Tuesday in cities including Mersin on the Mediterranean coast, Samsun on the Black Sea and the southern city of Adana, as well as Istanbul and Ankara.
Erdogan, campaigning around the country for March 30 local elections, has yet to comment on Elvan's death. He dismissed last summer's protesters as riff-raff, and has cast both those weeks of unrest and the corruption scandal which erupted in December as part of an orchestrated campaign to undermine him.
The uncertainty in the run-up to elections has unnerved Turkish investors, with the lira languishing at its weakest in five weeks, but has shown little sign so far of unseating the prime minister, fiercely popular in the conservative Anatolian heartlands for delivering a decade of rising prosperity.
"The recent barrage of corruption allegations ... appears to have had little impact on Erdogan's electoral popularity, merely deepening the political divides in an already highly polarised society," said Wolfango Piccoli, managing director of research firm Teneo Intelligence.
"(But) the death of a child on his way to buy bread for his family is something that cuts across political divides and will have particular resonance amongst the urban and rural poor who form Erdogan's core support base."
ERDOGAN STILL POPULAR
Istanbul and Ankara have both seen protests in recent weeks against what demonstrators regard as Erdogan's authoritarian reaction to the graft affair, which has included new laws tightening Internet controls and handing government greater influence over the appointment of judges and prosecutors.
But opinion polls suggest that while support for his AK Party may have slipped, it remains comfortably ahead of rivals, with Erdogan's supporters pointing to a sharp rise in living standards during his 11-year tenure.
Protesters stood by fires at barricades blocking roads around the poor Okmeydani neighbourhood. Signs on shop windows said stores would remain shut for two days, while traders sold black and white flags bearing Berkin's face.
Two labour unions called a one-day strike and encouraged members to attend the funeral while professors at some universities announced they were cancelling classes.
In the eastern province of Tunceli, which has an Alevi majority, around 1,000 school children marched across town and staged a sit-in in front of the offices of the ruling AK Party.
The boy's father, Sami Elvan, received mourners in front of the cemevi. His mother, Gulsum Elvan, embraced the mother of a man who died during last summer's protests, Ethem Sarisuluk.
"This is just the beginning, continue the struggle," the crowd chanted.
State media reported Deputy Prime Minister Bulent Arinc as saying music would not be played during his election campaigning out of respect for Elvan. Erdogan is due to address a second rally in the southeastern city of Mardin later on Wednesday.
"We were plunged into deep sadness by his loss of life in such an incident. May he rest in peace," Justice Minister Bekir Bozdag told state broadcaster TRT, adding that an investigation into the circumstances of Elvan's death was continuing. (Additional reporting by Daren Butler, Ayla Jean Yackley, Can Sezer and Evrim Ergin in Istanbul, Jonny Hogg in Ankara, Ferit Demir in Tunceli; Writing by Nick Tattersall; Editing by Ralph Boulton)