Turkey's president approves non-Muslim asset law

ANKARA (Reuters) - Turkish President Abdullah Gul has signed into law a reform long sought by the European Union improving the property rights of non-Muslim minorities, his office said on Tuesday.

The Foundations Law, approved by parliament last week, allows religious foundations to re-acquire some properties confiscated by the Turkish state. It also allows foreigners to set up foundations in Turkey.

Critics say the reform is too restrictive because it does not allow the return of properties seized and then sold on to third parties.

Turkish authorities have expropriated millions of dollars worth of property belonging to small but ancient Christian communities, especially the Greek Orthodox, over the decades.

Turkey's former president, Ahmet Necdet Sezer, vetoed the Foundations Law in November 2006 because he feared it could erode Turkey's separation of state and religion.

But Gul, a strong advocate of EU reforms, had been expected to back the law, introduced by the centre-right AK Party government in which he previously served as foreign minister.

The EU has welcomed the new law but it has also urged Turkey to create a comprehensive legal framework that allows all religious groups unrestricted freedom to operate in the overwhelmingly Muslim but secular country.

Last week, Gul urged Prime Minister Tayyip Erdogan's government to press ahead with other reforms sought by the EU amid accusations from Brussels and human rights groups that the membership drive has slowed to a virtual standstill.

(Reporting by Gareth Jones; editing by Richard Williams)