A Turkish prosecutor indicted 86 people on charges of plotting to overthrow a government accused by militant secularists of leading Turkey by stealth towards Islamic rule.

Some opponents of the government, which denies any secret Islamist agenda, call the controversial coup case revenge for court moves to outlaw the ruling AK Party and ban Prime Minister Tayyip Erdogan and President Abdullah Gul from party politics.

Chief Prosecutor Aykut Cengiz Engin filed the indictment on Monday at an Istanbul court after months of intense media speculation about the case that has hit financial markets.

"The indictment covers crimes such as forming an armed terror group.and attempting to overthrow the government by force," Engin told reporters at a news conference in the garden of an Istanbul court house.

In the last 50 years, military coups have unseated four elected governments in Turkey, a predominantly Muslim but officially secular country seeking to join the European Union.

The indictment targets the shadowy ultra-nationalist group, Ergenekon, which first came to light a year ago when a cache of explosives was discovered in a police raid on an Istanbul house.

The near 2,500-page indictment named 86 defendants, of which 48 are in custody. They include the head of a small nationalist party, a nationalist newspaper editor and retired army officers.

It was not clear which defendants were facing which charges.

Turkey was rocked last week when two senior retired generals, leading businessmen and journalists - all critical of the ruling party - were added to the list of those detained on suspicion of involvement in the plot. The case appears to be devloping into a power struggle between rival elites.

Those held last week have not been officially charged and an additional indictment is being prepared for them.

SERIES OF PLOTS

According to media reports, Ergenekon is accused of a series of plots to overthrow Prime Minister Erdogan, elected by a landslide in 2002, by stirring civil disobedience that would force the military to intervene.

Engin said legal restrictions made it impossible to unveil further details on the case. An Istanbul criminal court must now rule on whether to accept the indictment.

The case has added to worries in financial markets, which are already unsettled by a case to close the ruling AK Party on charges of anti-secular activities. The Constitutional Court is expect to announce a verdict in that case within three weeks.

Militant secularists dismiss the AK leadership's arguments that it has abandoned its Islamist roots and point to an attempt to allow the wearing of the Islamic headscarf in universities as just one proof of its intentions. They also fear AK is anchoring its position by placing people in places of influence and power in the courts, education, civil service and security services.

Markets were unaffected by Monday's scheduled announcement. The main share index rose 1.6 percent and the lira was firmer.

The secular establishment, which includes the military and judiciary, has long suspected the AK Party of seeking to turn Turkey into an Islamic state, something the party denies.

The AK Party embraces nationalist and centre-right market liberals as well as religious conservatives and has led the country through a period of strong economic growth and into European Union entry talks. It has a huge parliamentary majority.

The military - which has repeatedly criticised the government and considers itself the guardian of Turkey's secular system - has denied any links to the Ergenekon group.

Engin rejected criticism that it had taken more than a year to complete the indictment, saying this was unavoidable given the volume of documents and number of defendants involved.

As widely leaked to the media, the indictment included references to the killing of a judge in a 2006 armed attack on Turkey's top administrative court and to the bombing of a secularist newspaper.