ISTANBUL, March 24: Turkey will implement a critical social security reform package, backed under a programme with the International Monetary Fund, from the start of 2008, Labour Minister Murat Basesgioglu said on Saturday.

Economy Minister Ali Babacan said earlier in the week the law, aimed to overhaul the unwieldy social secuirty system which drains large chunks of the central government budget every year, would be delayed until after general elections due in November.

The government had already delayed implementing the reforms until July 1 after a constitutional court veto forced it to revise the package.

Basesgioglu, quoted by the Anatolian news agency, said the second delay was because of some major amendments to the law.

Because of the busy parliamentary schedule, it was seen as appropriate to us to postpone such extensive amendments...The start of 2008 is a reasonable alternative for us, he said.

The court rejected articles in the package that would apply to Turkey's 2.5 million civil servants, saying this issue must be regulated by another law, not by the government package.

The new law will be re-submitted to parliament after the views of the constitutional court have been taken into account, Basesgioglu said.

Investors are closely watching implementation of the package as a sign of the government's will to push through difficult reforms in an election year. The supreme court ruling followed an appeal from President

Ahmet Necdet Sezer, who often opposes government legislation, after his own veto of the reform was overruled by a second vote in parliament, where the ruling AK Party has a big majority.

Sezer had objected to plans to set the retirement age at 65, saying this was too high in a country where average life expectancy was just 66 years of age.

Turkey's social security deficit was 23.5 billion lira in 2006, or some 4.4 per cent of the gross national product target of $381 billion.---Reuters