(Repeats story from Thursday without changes)
* Turkish PM targets Hizmet schools abroad
* Hizmet says businesses also put under pressure
* Dispute complicates foreign policy effort
* Parents criticise surprise Gambian school closure (Adds comment from parents in Gambia)
By Ralph Boulton and Orhan Coskun
ISTANBUL/ANKARA, April 3 (Reuters) - Prime Minister Tayyip Erdogan's battle to root out the "terrorists" he says are embedded in the Turkish state is extending beyond its frontiers to Africa and Asia, further complicating foreign policy already hit by tensions with the Arab world and Western allies.
Last month, parents of the Yavuz Selim school in Kanifing, Gambia, received a letter announcing its immediate closure. A source at the school, run by the Hizmet organisation of Turkish cleric Fethullah Gulen, said the decision had been conveyed to the principal in a one sentence missive.
Gulen's Hizmet movement cites this as an example of Turkish pressure on governments to shut down Gulen schools, a key source of its influence and revenue at home and abroad, and discourage Hizmet-linked commerce from banking to construction.
Turkish Islamic lender Bank Asya, which has extensive dealings with Hizmet companies in Africa, reported it had suffered mass deposit withdrawals, weeks after a power struggle between Erdogan and Gulen erupted in December.
Media said institutional depositors loyal to Erdogan had withdrawn 20 percent of the bank's deposits. Ahmet Beyaz, Chief executive of the bank, which has among its shareholders Kaynak Holding, which is close to Hizmet, told Reuters the bank was not in any danger. The government would not comment.
Erdogan has declared Hizmet, long a mainstay of Turkish foreign policy, a terrorist movement using dirty tricks, including corruption allegations, blackmail and espionage to undermine him. His move to shut its schools in Turkey ignited the current confrontation.
"One of the greatest difficulties posed by the struggle against Hizmet is in diplomacy," said a government official who declined to be named. "Right now Hizmet and its representatives are fully engaged in anti-government activities."
"As it has been made public that the Hizmet schools will no longer be supported (by the Turkish government), a number of those countries do not want them to continue."
The battle against Hizmet, long an instrument of Turkish soft power claiming millions of followers worldwide, has diverted effort from a foreign policy already in some disarray.
Very recently, Erdogan was received as a hero in Egypt and his government cited in the West as a model for Islamic democracy. Now his ties with Arab capitals are icy, largely due to his siding with Islamist parties such as Egypt's Muslim Brotherhood, and relations with the West tested by a graft scandal and what some see as growing authoritarian tendencies.
SEEKING BREAD ABROAD
Hizmet denies using followers in the police and judiciary to launch a graft inquiry targeting Erdogan family members, ministers and businessmen and make illicit recordings of top officials. Ankara fears further leaks ahead of presidential polls in August could undermine the government.
The movement, also known as Cemaat (JEH-maat), The Community, has for decades been a spearhead of Turkish cultural influence and commerce overseas, especially so in the assertive opening to Africa, the Middle East and Asia in the years after AKP took power in 2002.
"In Turkey, we were at pains not to get involved in an economic relationship with the government," Tercan Basturk, Secretary General of the Journalists and Writers Foundation, which speaks for Hizmet, said at its Istanbul headquarters.
"Instead, we directed all Hizmet supporters to go abroad and told them to seek their bread outside the country."
It was long said there were three arms to Turkish diplomacy - the Foreign Ministry, Turkish Airlines and Hizmet.
Turkey currently has some 35 embassies in Africa, second only to France. About 15 opened in the last two years. The red Turkish flag flies, for instance, across Mogadishu, Turkish firms playing the lead role in post-war construction.
"A lot of this is due to the support of Gulen because in many places in sub-Saharan Africa the only real Turkish communities are Gulen-linked communities, whether schools or business, and the embassies were opened to support this drive," said Sinan Ulgen, head of the Edam think tank in Istanbul.
Where Erdogan has conducted a purge of alleged Gulen supporters in the police and the judiciary since December's anti-corruption raids, Turkey's embassies are now expected to a purge their relations with the cleric overseas to strangle income from enterprise, schools and donations.
"Almost overnight they (the Embassies) shift position where they are being asked to persuade those governments to close down those schools," Ulgen said. "Of course, some governments may want to accept this demand from the Turkish side."
Most likely to respond to Turkish displeasure would be states such as Gambia benefiting from direct aid from Ankara.
Parents of children at Gambia's Yavuz Selim school were less pleased at the abrupt closure.
"The closure of Selim school was a big surprise a big blow for not only the parents but our children," said Amadou Jah, whose son was at the school. "The authorities should have allowed the students to finish their academic year."
Another parent, Fatou Jobe, added: "It is very frustrating for parents because by this time of the year it's always difficult to find a school for our kids."
AFGHANISTAN TO PENNSYLVANIA
The Foreign Ministry itself is in some turmoil since it emerged that minister Ahmet Davutoglu's office was bugged and talks with the security chief and army commanders on possible armed intervention in Syria was posted anonymously on Youtube.
Overseas schools, Turkish cultural institutes and business, like Hizmet's presence in the Turkish state, have been built up over four decades. For much of that Gulen has lived in self-imposed exile in the United States, something that has for Erdogan supported the thesis that Hizmet is part of a broad foreign-backed anti-Turkish plot.
When Erdogan was first elected in 2002, he lacked educated specialists to press social and economic reforms he envisaged to ease curbs on religion, improving welfare and, foremost, rein in a military that had toppled four governments in as many decades.
He invited Hizmet to help and Hizmet obliged. The falling out has pushed Erdogan into his biggest crisis in 12 years.
Hizmet runs 2,000 educational establishments in 160 countries, from Afghanistan to the United States. The schools, such as the Yavuz Selim in Gambia, are well equipped, teach a secular curriculum in English, and are popular, especially in poorer countries, with the political and business elite.
"Until six months ago, government officials, the President, the Prime Minister were going to these schools and praising them and saying they were important for peace in the world," Basturk said. "The government is pressing the Hizmet movement from outside to put it in difficulty inside (Turkey)."
Erdogan has sought help from U.S. President Barack Obama in curbing "the man from Pennsylvania". On a lower level he has spoken to the head of Pakistan's Punjab about the schools.
The government accuses Hizmet overseas of running a propaganda campaign against the Turkish government through publications. Officials say the organisation is also carrying out other actions, unspecified, that can alarm host governments.
Hizmet says the Turkish government approaches different governments in different ways, according to local sensitivities.
"They say to the Russians 'kick them out', they are making pan-Turkish propaganda in their schools," said Basturk, referring to Russian sensitivities about Turkish-related populations in Russia, the Caucasus area and Central Asia. "We hear all this because we have friends there. (Additional reporting by Seda Sezer, and Pap Saine in Banjul; editing by Nick Tattersall and Giles Elgood)