The secular elite, who include army generals, judges and university rectors, view the headscarf ban as vital for the separation of state and religion.
They accuse the popular center-right, pro-business AK Party of plotting to boost the role of religion in Turkey, a claim Erdogan and his party deny.
Erdogan, whose own wife and daughters wear the headscarf, insists it is a matter of human rights in a country where about two-thirds of women cover their heads. Opinion polls also show strong public support for lifting the headscarf ban.
Public servants are also banned from wearing the Islamic headscarf in Turkey, but newspapers quoted a senior AKP lawmaker as saying the planned reform would only extend to university students.
Many women opt not to go to university because they want to keep their heads covered.
Thursday's move could increase political tensions in Turkey, a candidate for European Union membership. Financial markets are closely watching the headscarf debate.
Last year, the issue helped spark early parliamentary polls following mass secularist rallies and tough army warnings.
The powerful military, which views itself as the ultimate guarantor of Turkey's secular order, has not yet commented but it is unlikely to welcome the latest moves.
The army has ousted four democratically elected governments in the past 50 years, most recently in 1997 when with public support it drove out a cabinet it viewed as too Islamist.
But an increasingly wealthy but pious middle class is emerging in Turkey, an overwhelmingly Muslim but secular country, and it wants to practice its religion more freely.
The AK Party has come under strong pressure from grassroots supporters to act after winning re-election last July.
The MHP, Turkey's third largest party in parliament, has long backed relaxing the headscarf ban because, like the AK Party, it counts among its supporters many religiously conservative small businessmen and farmers in rural Turkey where a majority of women cover their heads.
Secularists tend to see the headscarf as a threat to the modernizing reforms of Mustafa Kemal Ataturk, who threw religion out of public life in the 1920s and 1930s as he rebuilt Turkey from the ruins of the Ottoman Empire. They say any relaxation of the ban could turn Turkey into another Iran.
Critics say the secular elite uses Islam as an excuse to keep control of key state institutions for its own benefit.
In 2005, the European Court of Human Rights ruled that the headscarf ban in Turkish universities was not a violation of fundamental freedoms and could be necessary to protect Turkey's secular order against extremist movements. |