Students may soon be allowed to wear the Muslim headscarf in Turkish universities, a watershed for a devout, growing middle class that has long complained of discrimination against its faith.

Turkey's popular Islamist-rooted government and a nationalist opposition party agreed on a compromise this week to lift a 1989 ban on female students wearing the Islamic headscarf in higher education, a move unthinkable only a few years ago.

The amendment is expected to be approved by parliament early this month.

As recently as 1997, Turkey's army generals, acting with public support, ousted a government they deemed too Islamist.

"Lifting the headscarf ban in universities is a big step for Turkey, even if the reform is insufficient. It will mean a lot of women who suffered from the ban will be able to study again," said Neslihan Akbulut of women's rights group AKDER.

Turkey's secular establishment, which includes generals, judges and university rectors, sees the headscarf as a symbol of radical Islam and a political challenge to the NATO member's separation of state and religion. Turkey is 99 per cent Muslim.

The Turkish republic was founded as a secular state by Kemal Ataturk in 1923 from the crumbling Islam-based Ottoman Empire.

Thousands of women have in the past two decades chosen not to go to university because of the ban, have studied abroad or have been expelled from their studies for wearing a garment that covers their hair as a sign of piety.

The headscarf debate goes to the very heart of Turkey's complex identity. It is a young democracy that is struggling to balance the demands of an increasingly prosperous but pious Muslim population and a traditional urban pro-Western elite that sees Islam as backward and a threat to the status quo.

"I was expelled from university because I wore the headscarf. How can you expel someone in a country that is supposed to be democratic and whose population is Muslim?" said Yuce Yilmazoglu, 31. She is still trying to finish her law degree in Istanbul. "It undermines our democracy," she said.

The ruling AK Party has been at pains to present itself as a strictly democratic pro-Western administration. It has pursued European Union membership talks, improved rights and worked to liberalise the economy, bringing record foreign investment.

The party has long wanted to lift the ban on the headscarf, saying the issue is a matter of religious and personal freedom, but has been wary not to upset the generals.

The decision by the AK Party, which traces its roots to a banned Islamic movement, to push the reform also reflects its confidence to challenge a weakened secular old guard after the party won a sweeping re-election last July.

A majority of Turks back giving women the right to wear the headscarf in universities, according to recent opinion polls.

"I back lifting the ban because I have always been in favour of freedoms. A person over the age of consent should be able to wear what she chooses," said Bilkent University professor Erdun Ozbudun during a heated televised discussion. Many secular women are concerned that easing the ban will eventually usher in a more strict form of Islam in Turkey.

"All female students may eventually be forced to wear headscarves," said Isa Esme, deputy head of the powerful secular body overseeing higher education.

Akbulut of AKDER blamed political parties and the parts of the media for exploiting what she said were unfounded fears.

"If someone is afraid of a spider you can't do anything, they'll still be afraid of it, however much you try to convince them the spider is not dangerous," she said.

"Just like they have the choice not to wear the headscarf I should have the choice to follow my religious beliefs," said Akbulut, who studied abroad when universities enforced the ban.

"At present I feel I am not a citizen of my own country."

Under the new proposal, which will require constitutional amendments, only women who tie their scarf in the traditional Turkish way under the chin would be allowed into university.

The ban would continue to apply to the increasingly popular wrap-round headscarf, seen as a symbol of political Islam. Other forms of Islamic dress such as the burqa, which conceals the whole body, would remain banned.

"It is comical that a law goes into so much detail. Will we have to employ fashion designers at university gates to check students?" said Ozbudun, a constitutional law expert.

At a recent pro-headscarf rally in Istanbul, protesters called for teachers and civil servants to also be allowed to wear the Islamic scarf, pointing to further conflict ahead.

"If the ban is unjust for those going to university it is unjust for those giving services, like doctors or teachers. What will these students do when they graduate?" shouted organiser Ramazan Beyhan, who wants all headscarf restrictions lifted.

The main opposition Republican People's Party has threatened to go to the courts to block the new amendment.