EU: The European Commission has given Turkey an extra five weeks to open its ports and airports to Cypriot traffic or face the possible suspension of its talks to join the EU.
It has also signalled that it will take a more cautious approach to future enlargement of the Union and attempt to boost public support for the process in Europe.
The Turkish prime minister, Recep Tayyip Erdogan, responded sharply to the report, saying his country would not change its stance on the ports issue until the isolation of Turkish northern Cyprus ended.
As expected, the commission's annual monitoring report on the progress of Turkey toward EU membership criticised Ankara for slowing the pace of political and legal reform.
It also warned Turkey that its failure to implement the Ankara Protocol - a customs agreement that would force it to open its ports to Cypriot vessels - before an EU summit in mid-December would affect its "overall progress in the negotiations".
Turkey is refusing to implement the protocol, which it signed last year, because Cyprus will not lift a blockade of its protectorate in northern Cyprus.
EU enlargement commissioner Olli Rehn said the commission would make a recommendation to EU leaders on the issue before the summit. He would not expand on what recommendation the commission would make if Ankara did not implement the protocol, but EU sources said it would probably be a full or partial suspension of the talks.
"The EU, its member states and Turkey should focus their energy in achieving a solution," said Mr Rehn, who offered full support to an initiative by Finland, the current holder of the rotating EU presidency, to find a solution to the ports problem.
Finland's hopes of brokering a solution on the Cyprus issue within five weeks receded somewhat last night following a hard line statement by Turkish prime minister Tayyip Erdogan.
Responding to the commission report on Turkey, he said: "Unless isolation of the Turkish Republic of Northern Cyprus is lifted, we will never give up our determination on the issue of ports and airports."
Mr Erdogan faces an election in Turkey next year and analysts speculate that he has little room to manoeuvre on the Cyprus issue due to domestic opinion. However, ahead of the publication of the commission report, he did signal that Turkey would make key reforms on freedom of speech - another area of concern targeted by the commission.
In the report the commission criticised a slowdown in the pace of reform in Turkey since it began accession negotiations last October. "Significant further efforts are needed in particular on freedom of expression. Further movements are also needed on the rights of non-Muslim religious communities, women's rights, trade union rights and on civilian control of the military," said the 74-page report.
The report also highlighted the notorious article 301 in the Turkish penal code, which enables prosecutors to make charges against journalists, authors and intellectuals for "insulting Turkishness". It also noted that there was a downward trend in the number of cases of torture and ill-treatment in detention centres in Turkey, though cases were still being reported.
On a more positive note, the report said that Turkey could be regarded as a functioning market economy and Ankara was in the process of implementing its ninth reform package.
Mr Rehn also noted that the public debate in Europe often did not reflect that reforms were taking place in Turkey. The problem was simply they had slowed.
European public opinion is split over Turkish accession, with Austrians and French people and politicians among the most sceptical. Opinion within the commission is also split, with the Cypriot, Greek, Austrian and French commissioners urging yesterday that a tougher statement should be issued. However, Mr Rehn and European Commission president José Manuel Barroso persuaded the college not to make a formal recommendation on suspending talks to EU leaders for a few weeks at least.