REPUBLIKA.CO.ID, ANKARA - Turkey's ruling party begins deliberations on the shape of the next government on Monday after Prime Minister Tayyip Erdogan (60 years) secured his place in history by winning the nation's first direct presidential election.

Erdogan's victory in Sunday's vote takes him a step closer to the executive presidency he has long coveted for Turkey. But it is an outcome which his opponents fear will herald an increasingly authoritarian rule.

In the coming weeks, Erdogan will for the last time chair meetings of the ruling AK Party he founded and oversee the selection of a new party leader, likely to be a staunch loyalist and his future prime minister. He will be inaugurated on Aug. 28.

"Today is a new day, a milestone for Turkey, the birthday of Turkey, of its rebirth from the ashes," Erdogan told thousands of supporters in a victory speech from the balcony of the AK Party headquarters in Ankara late on Sunday.

Supporters honking car horns and waving flags took to the streets in Ankara after results on Turkish television said Erdogan, the prime minister for more than a decade, had won 52 percent of the vote. The celebratory mood filled the front pages of pro-government newspapers.

Investors initially welcomed the result on hopes that it would ensure political stability, after nearly 12 years of AK Party rule. The lira TRYTOM=D3 rallied to 2.1385 against the dollar from 2.1601 late on Friday. However, some said the market reaction could be short-lived.

"We expect the market will refocus on the composition of the cabinet," said Phoenix Kalen, a London-based strategist at Societe Generale, warning there could be "investor concern over the future trajectory of economic policy-making".

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