Turkey's prime minister, Bulent Ecevit, has been admitted to hospital for the second time in a fortnight, triggering nervousness in the country's financial markets.

The 76-year old prime minister has sought to calm fears that his illness puts at risk Turkey's pact with the International Monetary Fund (IMF).

"My temporary illness is not a reason for damage to the future of our economy or our political situation," Mr Ecevit said in a statement from hospital.

But the main index stock index, the XU100, continued to fall in early trade on Monday.

It was down 0.2% after shedding 5% on Friday when news of Mr Ecevit's return to hospital first emerged.

Lifeline loans

Mr Ecevit is viewed as the key figure holding together Turkey's three-party coalition government, an alliance of his Democratic Left party with conservatives and right wing nationalists.

I believe it is wrong to think that if there was an election everything would be overturned

Kemal Dervis Economy minister

His illness coincides with growing pressure to bring forward the general election due in spring 2004.

After a year of economic pain following the devaluation of the lira, the IMF granted Turkey $16bn of funds in February 2002.

The loan package, which made Turkey the Fund's biggest borrower, was dependent on the coalition pushing through reforms.

'No crisis'

Economy minister Kemal Dervis weighed in to calm the markets on Monday.

"I believe it is wrong to think that if there was an election everything would be overturned," he said.

"There is no systemic risk now," he said, pointing to reforms ensuring the independence of the central bank.

Turkey's banks have been recapitalised and streamlined, with many loss-making private banks being taken over without compensation in order to strengthen the financial system.

Better prospects

Analysts are hopeful Turkey can return to economic growth this year after the economy shrunk 9.4% last year - the country's worst recession for 50 years.

After Turkey devalued its currency in February 2001, inflation soared by about 80% and hundreds of thousands lost their jobs.

The lira strengthened slightly on Monday to trade at 1.42 million lira to one US dollar after heavy falls last week.

Doctors were also predicting recovery for Mr Ecevit on Monday.

Inflamed leg

"The prime minister has become partially mobile and is sitting in an armchair carrying out his daily work," according to a statement released by the hospital.

It said Mr Ecevit was suffering from inflamed veins in his leg and a broken rib.

He was taken to hospital with an intestinal infection two weeks ago and has been working from home since then.

A general election is due in spring 2004 but expectation is growing that the vote will be held earlier.

Mr Dervis said the government needed to quell speculation about the timing of the poll by coming up with "a formula that was more credible to everybody" on the date.