* Coach's contract ended by mutual consent
* Turkey lose out to Croatia in 2012 playoff
* Sports minister says replacement should be Turkish (Adds quotes and byline)
By Daren Butler
ISTANBUL, Nov 16 (Reuters) - Guus Hiddink's contract as Turkey coach has been terminated by mutual consent following the team's failure to reach the Euro 2012 finals, the Turkish Football Federation said on Wednesday, ending a disappointing spell in charge for the Dutchman.
The decision, announced on the federation's website (www.tff.org), had been expected after Tuesday's 0-0 draw in Croatia which completed Turkey's 3-0 aggregate defeat in their playoff.
Even before the playoffs, the 65-year-old Hiddink had been under fire in the Turkish media for failing to inspire a team which reached the semi-finals of Euro 2008 after defeating Croatia in the quarter-finals.
"Following the meeting between the Turkish Football Federation executive committee and Turkey head coach Guus Hiddink, the Dutch coach's contract has been terminated by mutual consent," the federation said.
"We would like to thank Mr. Guus Hiddink for his services during his working period, and wish him all the best in his future career," it added, saying it would announce developments regarding a new coach in the coming days.
Turkish media reports said the coach of first division Istanbul club Buyuksehir Belediyesi Spor, Abdullah Avci, was set to be announced soon as Hiddink's replacement.
In February last year Hiddink agreed a four-year contract, with the final two years optional, but Turkey's performances under him caused widespread disappointment.
After the first leg against Croatia, Atletico Madrid forward Arda Turan lambasted Hiddink's tactics in the Turkish media, saying they invited defeat and accusing Hiddink of being too timid and not believing in his players.
Hiddink told reporters the lack of support and opportunities for young players at clubs lay at the heart of Turkey's inconsistency on the big stage and their failure to reach Euro 2012.
He criticised an "inefficient system" depriving young players of a chance to develop.
Sports Minister Suat Kilic said the new coach should be Turkish.
"I'm of the view that there should be a Turkish coach in charge of the Turkey national football team," he told broadcaster NTV .
He contrasted Hiddink sitting in a winter coat in the dugout in freezing temperatures throughout Tuesday's match with Croatia's Slaven Bilic directing his players from near the touchline in a jacket and shirt.
"As good as Hiddink is, he was unable to gel with the players or our country and that was why he was unsuccessful," Kilic said.
Bilic himself defended Hiddink, saying: "I told him last night that it would be a pity and a shame for football if he retired and that he should not do it.
"He is a gentleman, a great coach and a brilliant man," Bilic told a news conference in Zagreb on Wednesday.
"If I had to single out one coach that I really admire, it would be him," added Bilic, who was himself on the verge of losing his post last month after failing to qualify directly from what was seen as an easy group, eventually won by Greece.
Hiddink, whose coaching career has included spells in charge of the Netherlands, Australia, South Korea and Russia, has previously been linked with a move to Chelsea, where he had a good relationship with the Premier League club's billionaire Russian owner Roman Abramovich. (Additional reporting by Zoran Radosavljevic in Zagreb; Editing by Clare Fallon)