Prime Minister Tansu Ciller has said she will work to form a new government, despite the 20 September collapse of the coalition between her True Path Party (DYP) and the Republican People's Party (CHP).

The collapse followed the election of Deniz Baykal as the new leader of the CHP on 10 September. Baykal had made clear his belief that there should be early general elections. Ciller has consistently maintained that elections should be held, as scheduled, in October 1996. Baykal held talks with Ciller on 20 September, after which he pronounced the coalition dead.

Analysts say Ciller will either seek to form a coalition with the Motherland Party (ANAP), or will try to form a minority government based solely on the DYP.

The political crisis caused havoc on financial markets, as investors rushed to sell stocks.