By Gabriela Baczynska
BRUSSELS (Reuters) - The European Union was divided on Monday on how to handle Turkey over its crackdown on alleged supporters of a failed July military coup, with Austria leading calls to suspend Ankara's EU membership bid and Britain firmly in favor of maintaining ties.
As the 28 EU foreign ministers met in Brussels, President Tayyip Erdogan said he was ready to hold a referendum on whether to continue the membership talks and also repeated his line that he would reinstate the death penalty - a move sure to scupper the negotiations - if parliament passed such a law.
Turkey has suspended, dismissed or detained at least 110,000 people, including soldiers, judges and teachers, since the coup. Critics of President Tayyip Erdogan accuse him of using it as a pretext to crush dissent, a charge he denies.
"I am not for the continuation of entry negotiations and I believe that this Turkey does not have a place in the European Union," Austria's Foreign Minister Sebastian Kurz said on his arrival in Brussels for talks among the 28 EU foreign ministers.
But Boris Johnson, the foreign minister of Britain, which intends to leave the EU in the next few years, cautioned against over-reaction to events in Turkey, a large, strategically important, mainly Muslim country on the EU's southeastern flank.
"We should not push Turkey into a corner, we should not overreact in a way that is against our collective interests," said Johnson.
Despite its increased concerns over human rights and press freedoms in Turkey, the EU has often toned down its criticism of Erdogan and his government, whose cooperation it needs to keep low the number of refugees and migrants reaching Europe via Greece from Turkey.
More than 1.3 million people arrived in Europe last year, triggering bitter disputes between EU member states over how to handle them. The deal with Turkey, though much criticized by rights groups, has sharply reduced the flow of people.
Turkey has often threatened to walk away from the migration deal if the EU does not deliver on its side of the bargain and relax visa rules by the end of the year for its citizens visiting Europe.
Ankara has also accused the EU of failing to show sufficient solidarity with it over the failed coup, in which more than 240 people were killed. Erdogan blames a U.S.-based Muslim preacher, Fethullah Gulen, and his supporters for the putsch.
Luxembourg largely backed Austria's tough line on Turkey's accession bid, but the bloc's most powerful members, France and Germany, argue in favor of engagement and say breaking off the negotiations now would do more harm than good.
Chancellor Angela Merkel of Germany, which took in the lion's share of refugees and migrants, is particularly keen for the deal with Turkey to hold as she faces elections next year in which a new anti-immigrant party is projected to perform well.
"We are not even approaching this stage (of breaking off accession talks)," one diplomat said.
"This is no time to escalate, slam them (the Turks). It really is for Turkey now to make up their minds if they want to continue building closer ties with the EU or not."
Diplomats said Johnson spoke out during Monday's discussions for a transactional relationship with Turkey. They took that as a suggestion that human rights were of secondary importance in his view.
EU foreign policy chief Federica Mogherini responded by saying Turkey's accession bid would automatically end if it decided to reinstate the death penalty, the diplomats said.
Commenting on what they saw as Britain's desire to prioritize economic ties even at the expense of human rights, another diplomat said: "This is the new post-Brexit reality and London is only emboldened in that (stance) by the election of Donald Trump in the United States - talking of doing business."
"It is an attack on European values. It is saying we should not stick to them but focus on what deals we want to make."
(Additional reporting by Robin Emmott and Philip Blenkinsop, Editing by Gareth Jones)