By Robin Emmott and Gabriela Baczynska
VALLETTA (Reuters) - The European Union will seek to end an ugly spat with Turkey on Friday despite deep unease about Ankara's future under President Tayyip Erdogan, whose sweeping new powers and crackdown on opponents appear to have ended the country's EU ambitions.
Meeting in Malta, Turkish Foreign Minister Mevlut Cavusoglu and his EU counterparts aim to try to defuse a crisis in relations that has pushed the European bloc toward a formal halt to Turkey's long-stalled talks to join.
Erdogan's referendum victory that granted him greater powers, his crackdown on perceived opponents and comments comparing some EU governments to Nazis have alienated many in the bloc, but it still needs to maintain cooperation with Turkey, a strategic NATO ally.
"Business as usual is not an option," said the European Union's enlargement chief, Johannes Hahn, who manages Turkey's membership bid and will attend the Malta meeting.
"Let's keep a cool head and devise a package that enables us to work with Turkey," Hahn said, in a signal that the EU may downgrade ties with Ankara but seek to maintain a relationship based on trade and security cooperation.
Turkey's membership talks, launched in 2005, have been de facto frozen by political obstacles over Cyprus and resistance in some EU states to let in the majority Muslim country of 80 million people, even before the most recent events.
While Austria is adamant Turkey is no longer fit to even be considered an EU candidate, many other governments fear being seen as rejecting Turkey. That is partly out of concern for a deal with Ankara that has stopped the flow of refugees in Europe from Syria's civil war.
"It is not for the EU to walk away," said one senior EU diplomat. "It should be Turkey's choice."
Erdogan told Reuters that Turkey would reconsider its position on joining the European Union if it was kept waiting much longer, but also that Turkey was still committed to negotiations.
Given that neither side may want to be seen as formally ending the membership process aimed at helping modernize Turkey's economy and strengthening its judiciary, one EU official said the priority was "to get out of a blind alley".
The EU is Turkey's biggest foreign investor and biggest trading partner, while Turkey's border with Iraq, Syria and Russia in the Black Sea make it an important ally.
Erdogan supporters say the president is cementing his powers to strengthen the country after a failed coup last July, NATO's chief stressed the need to respect democracy.
"Turkey has the right to prosecute those who were behind the failed coup attempt," NATO head Jens Stoltenberg said. "But that has to take place based on the rule of law."
(Additional reporting by Tom Koerkemeier; Editing by Robin Pomeroy)