By Ralph Boulton and Orhan Coskun
ISTANBUL/ANKARA, March 31 (Reuters) - As Tayyip Erdogan's campaign bus swept into Izmir, lair of his political enemies, he looked up and saw a woman making what he took to be a rude gesture at him from a balcony. Plainclothes police officers soon came knocking at her door.
Turkey's prime minister is a man impassioned and irascible, who feels himself under siege by an enemy largely unseen. Critics say his team of confidants has narrowed as he prepares what may prove a visceral struggle to seize back levers of state power he says have been claimed by a covert network of traitors.
"The main reason for Erdogan's anger now is this sense of having been deceived," said a government official, who asked not to be named. "He is taking this very personally."
Bolstered by triumph at Sunday's local elections, Erdogan seems set on righting what he sees as a great mistake made in the early days of his rule in 2002 when asked U.S.-based Muslim cleric Fethullah Gulen to provide the trained cadres in the police and judiciary he needed to roll back anticlerical military influence in politics. Gulen, who had spent decades educating followers in a chain of schools, duly obliged.
Erdogan now accuses his Hizmet movement of being behind a wholesale usurping of the instruments of state power in police and judiciary in a campaign of blackmail and slander including graft allegations and security breaches meant to discredit him. He has removed over 7,000 police and hundreds of prosecutors.
Gulen, who has said little, denies any mischief and suggests Erdogan is simply giving in to his own authoritarian tendencies.
His 12 years in power have seen a rise in living standards, and a particular improvement for conservative rural areas.
But critics accuse Erdogan, who may run for president in August, of using his power struggle with Hizmet as a cover to entrench dictatorial powers, creating an inner state apparatus based on close personal loyalties. An increasingly ineffectual administration, they say, could endanger the unity of a country criss-crossed by ethnic, religious and social faultlines.
Erdogan's Turkey has long been held up in the West as a worthy example of a functioning Islamic democracy, on the edge of a volatile Middle East. But the last year, which has also seen a harsh crackdown on protests, has raised questions about political stability and the durability of the economic revival.
Government officials are reluctant to be named in discussing what became a serious national security crisis with the anonymous release on YouTube on Thursday of a recording of Turkey's spymaster discussing possible intervention in Syria.
"The question is whether it is too late," said one source close to the government. "When he puts new people into, say, the police can he be sure their loyalty is not to Gulen? No."
Erdogan has given notice he plans to hunt down those behind the leaks, as well as journalists he believes support Gulen.
Erdogan expects the backing of the population, including the 54 percent who did not vote for his AK party on Sunday. But he remains dismissive of opposition parties he dubs an alliance of evil in cahoots with Hizmet. The woman on the balcony, he told a rally, was symptomatic of the opposition CHP.
"Today as I was arriving (there was) a woman on a balcony," he said. "She made such an ugly gesture with her hand. There you go, that is the CHP. I mean the country's prime minister is passing by and you make that gesture with your hand and arm."
The woman, who said she was simply waving to a friend, was kept at a police station until midnight and questioned on suspicion of the offence of insulting a high official. She was then released. But the message was clear to those who might seek to challenge his authority, whether parliamentary opponents or what Erdogan calls the Gulenist "parallel state".
CHP member of parliament Faruk Logoglu sees a fragmentation of society and the state apparatus:
"Democratic institutions are no longer democratic, professional institutions no longer professional," he said. "What we have is three states. The first is what we might call the true Turkish state, the second, if you like, is the 'parallel state of Gulenists'."
The third, he argues, is the AKP or Erdogan state.
A government official, rejecting the notion of Erdogan as dictator, remarked: "He is in essence a leader who makes and implements his own decisions. That's what makes him Erdogan." He is, however, a man who can listen and be persuaded.
At rallies, though, his language has become increasingly divisive. His campaign to right injustices and the disdain conservative religious Turks have suffered over decades at the hands of an urban secular elite have turned often to a scorn for those he sees as the perpetrators, those who, in his words, "sip their whiskies on the shores of the Bosphorus".
Critics say Erdogan appears increasingly now to rely on a small group of confidants as the influence of the centre-right liberal element of his party has dwindled and the conservative religious base asserted itself. This process was strengthened in recent weeks with turmoil over purges and graft accusations.
Armed forces deputy commander Yasar Guler alluded to problems of disruption in the state apparatus at a top secret meeting with Turkey's intelligence chief and foreign minister that was recorded by persons unknown and posted on YouTube. Decisions, he said, were not being taken.
"We have been paralysed," General Guler was quoted as saying. "That is our problem, minister. The state instruments are not working at the moment."
Turkey's foreign ministry, which had hosted the meeting, acknowledged the recording was genuine but said some parts had been manipulated with the aim of discrediting the government.
Erdogan's closest confidant, spymaster Hakan Fidan, played a central role in the conversation about Syria.
Fidan's MIT intelligence service, unlike the police, remains firmly under Erdogan's control and is playing a key role in trying to stop the hacking of confidential state communications.
Dozens of recordings have appeared on the Internet, some involving Erdogan and relatives suggesting corrupt activities. Erdogan says they were manipulated to give a false impression.
The peril for Erdogan is that more recordings touching on any aspect of state or personal life may emerge.
Critics accuse him of trying to create his own "police state" based on a stronger MIT: "He has turned the country into a police state," CHP leader Kemal Kilicdaroglu said. "This is someone who uses his intelligence services to follow everyone, including me ... His self-confidence, his ego, is so strong."
Erdogan says Gulen's "parallel state" is the true threat.
Sunday's local elections, where the AKP won 46 percent of the national vote, suggest many Turks agree with him and do not believe or are indifferent to the corruption accusations.
As well as economic gains, his defence of religious values has proved popular with many. As he took the acclaim from supporters on Sunday, his wife Emine stood beside him, wearing a headscarf that, a decade ago, would have had her ejected from any state institution in Turkey for breaching secular laws.
The battle to win back full control of state institutions and not least organs of state security may be a long one and the outcome is uncertain. Erdogan's victory speech on Sunday night suggested he saw no point in seeking reconciliation with the opposition, including the women on balconies, to pursue it. (Additional reporting by Orhan Coskun; Editing by Alastair Macdonald)