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Thu Feb 26, 2009 10:35am GMT

* Journalists fear reprisals if criticise govt

* Media group in row over govt graft allegations

* Media freedoms rise as part of EU membership drive

ANKARA, Feb 26 (Reuters) - The United States accused Turkey of limiting freedom of expression in its annual human rights report and said journalists feared reprisals if they criticised Prime Minister Tayyip Erdogan's government.

The report, published on Thursday in Washington, comes amid an escalating row between Turkey's largest media company Dogan Yayin (DYHOL.IS) and the government.

Last week, Dogan Yayin was fined nearly $500 million in penalties and back-taxes following an investigation by tax authorities, which Turkey's leading press association said was aimed at silencing critical reporting.

Erdogan has sharply criticised Dogan, which owns top selling dailies Hurriyet, a news agency and broadcasters, and has called on supporters not to buy the group's newspapers after they ran stories alleging government corruption.

"Several large holding companies which owned news agencies in the country were concerned over losing business opportunities if their journalists wrote articles critical of the government," the State Department report said without naming any group.

"Senior government officials, including Prime Minister Erdogan, made statements during the year strongly criticizing the press and media business figures, particularly following the publishing of reports on alleged corruption in entities in Germany connected to the ruling party," it said.

Dogan Yayin, which controls almost half of Turkey's print and broadcasting media, reported on a trial in Germany last year involving an Islamic charity accused of embezzling donations and sending funds to a Turkish pro-government media outlet.

Erdogan has denied the graft allegations and the Finance Ministry has said the Dogan fine was the result of a routine tax inspection and was not politically motivated.

As part of negotiations to join the European Union, Ankara has expanded free speech and eased restrictions on the media, including amending a penal code article which punished Turks for "insulting Turkishness".

The article was changed, replacing "Turkishness" with "the Turkish nation", but the State Department report noted that restrictions still existed despite the amendment, particularly over the sensitive subjects of mass killings of Armenians during World War One and minority ethnic Kurds.

The report also found evidence of curbs on the Internet.

Hundreds of internet websites, including the popular YouTube, have been blocked in Turkey. The majority of sites in Turkey closed by court order are due to allegations sites encourage suicide, child pornography, help users access drugs, promote prostitution or insult the founder of modern Turkey. (Editing by Jon Boyle)

© Thomson Reuters 2009 All rights reserved.

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