The European Commission prepared yesterday to deliver a critical verdict on Turkey's progress towards European Union membership while trying to avoid any breakdown in its accession process.

The 25 commissioners will put finishing touches to their annual enlargement report today, formulating sensitive wording on Turkey's failure to open its ports to ships from Cyprus as required by its EU customs union.

But top Commission officials agreed on Monday evening on the importance of keeping negotiations going despite a perceived slowdown in reforms since Turkey began entry talks last year and will avoid making any negative recommendation.

Aides said Commission President José Manuel Barroso was keen to give Turkey a chance to move on reforms and on Cyprus before EU leaders meet in mid-December to decide what consequences to draw for an accession process set to last at least 10 years.

"Serious things may happen in December if Turkey does not deliver on its commitment (on Cyprus)," one official said. But the official added: "Nobody wants to stop the process, nobody wants to break off the negotiations."

Another official stressed that efforts were continuing to get Turkey to open its harbours to ships from Cyprus, with EU president Finland making intensive diplomatic efforts, and the year was not yet over.

German Chancellor Angela Merkel, who takes over the EU chair from Finnish Prime Minister Matti Vanhanen in January, said after talks with him in Berlin: "We do not want there to be a confrontation (with Turkey)."

The Commission's draft strategy paper, seen by Reuters, says Turkey continued to make progress in reforms this year, "However, the pace of reforms has slowed down."

It calls for further efforts to strengthen religious freedom, women's rights, minority rights and trade union rights and assert civilian democratic control over the military.

The report acknowledges "anxieties and misapprehensions" about enlargement in public opinion but puts the onus on member governments to convince their citizens of the economic and political benefits of expansion.

Criticising prosecutions of writers and intellectuals for "insulting Turkishness" by expression political opinions, the EU executive says: "It is necessary to ensure freedom of expression without delay by repealing or amending Article 301 of the penal code and by overall bringing the legislation into line with European standards."

Turkish Prime Minister Tayyip Erdogan sought to defuse the EU criticism by announcing on Sunday that he would consider amending the offending article to meet European standards.

A leading economist on Turkey said a partial or total breakdown in Turkey's negotiations to join the EU would probably slow and raise the cost of Ankara's economic reforms.

Rauf Gonenc, coordinator of the Organisation for Economic Cooperation and Development's economic survey on Turkey, told a briefing that the EU accession process was an extremely helpful anchor for Turkish reform.

"Preservation of this anchor would contribute to a continuation of this path," he said.

But a fall in the Turkish lira and a rise in inflation during emerging markets turmoil in May and June had shown Turkey's continuing vulnerability.

"The Turkish economy is still vulnerable both to cyclical changes and to possible political shocks," he said.

Asked what impact a possible partial suspension of Turkey's EU accession talks would have, he said Ankara would likely continue economic reforms "but probably more slowly, at a higher cost and in different ways".

The Commission report will stress that the EU is not likely to take in any more candidate countries in the near term, nor to have another big wave of expansion comparable to the 2004 "big bang" in which 10 mainly ex-communist countries joined.

But it spells out the need for a reform of EU institutions before the bloc can expand beyond the 27 members it will have when Romania and Bulgaria join in January.

"Before any further enlargement the EU will have to decide on the scope and substance of those institutional reforms," the paper said. "A new institutional settlement should have been reached by the time the next new member is likely to be ready."