By Nick Tattersall and Justyna Pawlak
ISTANBUL/BRUSSELS (Reuters) - Turkey warned German Chancellor Angela Merkel on Thursday not to play politics with its European Union ambitions as Berlin blocked moves to open a new chapter in Ankara's EU membership talks next week.
Turkey said failure to open the chapter would be a major setback in Ankara's relations with the bloc and one senior Turkish official said it would "draw a strong reaction".
Many EU capitals want to take the long-awaited step on Turkey's path towards the EU next Wednesday, arguing Europe should capitalize on Ankara's rising influence in the Middle East.
But Germany has criticized Prime Minister Tayyip Erdogan's heavy-handed response to weeks of anti-government protests and refuses to agree to open a new negotiation area, potentially the first such step in three years.
Germany blocked the opening of the new chapter, dealing with regional funding issues, at a meeting of EU ambassadors on Thursday, EU diplomats said.
The EU has so far not cancelled next Wednesday's planned talks with Turkey, an EU source said.
EU governments agreed to think about the issue over the weekend, and may return to it next week, but at this stage, there were no firm plans to do so, the EU source said.
"The Germans have to report back home but it seems they are leaning towards not opening the chapter," one EU diplomat said, speaking on condition of anonymity.
Ireland, which holds the EU presidency, said it continued to seek consensus to open a new chapter with Turkey next Wednesday.
Merkel's conservatives have rejected Turkish EU membership in their German election program, saying the country would "overburden" the bloc because of its size and economy, sparking anger in Ankara.
"If Mrs Merkel is looking for domestic political material for her elections, that material should not be Turkey," Turkey's EU minister Egemen Bagis told reporters on Thursday.
"If Mrs Merkel looks into it she will see that those who mess about with Turkey do not have an auspicious end," he said.
Opposition in Germany to Turkish EU membership has grown in recent years, with two thirds saying they opposed it in a new poll by Forsa for Thursday's edition of weekly magazine Stern.
Merkel said on Monday she was "appalled" by the crackdown on protesters in Istanbul. The protests began over a redevelopment project in a park, but spiraled into an unprecedented show of defiance against what Erdogan critics call his authoritarianism.
Police fired teargas and water cannon to disperse stone-throwing protesters night after night in cities including Istanbul and Ankara, unrest which left four people dead and some 7,500 suffering from injuries ranging from cuts to breathing difficulties, according to the Turkish Medical Association.
European Commission President Jose Manuel Barroso declined comment on Turkey's EU membership talks at a Vienna press conference on Thursday, but said: "Of course we have been following (with) concern recent developments in Turkey."
"We believe it is good for Turkey and also in the interests of the European Union to remain engaged with them, but of course one way of remaining engaged is also very sincerely (to) express our concerns when we have this kind of concerns," he said.
Erdogan and his government have bristled at foreign criticism of his handling of the unrest, saying the response was no different to police action taken in the past in countries including Germany and the United States.
Turkey's Hurriyet newspaper quoted a senior Turkish diplomat on Thursday as saying Ankara could suspend negotiations with Brussels altogether if the new chapter is not opened next week, although other officials were more cautious.
"A decision not to open this chapter would definitely send the wrong signal and will draw a strong reaction from Turkey," a senior Turkish official told Reuters.
"We are telling everyone that this is what we agreed to do months ago ... and if it does not happen, it would definitely be a political decision," he said.
Germany is Turkey's largest trading partner in the EU and is home to some three million Turks, the biggest diaspora in Europe.
All of the major German parties are trying to appeal to voters with immigrant backgrounds ahead of a federal election on September 22 in which Merkel will be trying to win a third term.
But Merkel's party says Turks in Germany are more interested in jobs and conservative values than Turkey's EU membership, supported by the opposition Social Democrats and Greens.
(Additional reporting by Adrian Croft in Brussels, Mike Shields in Vienna and Stephen Brown in Berlin; Editing by Michael Roddy)