Turkish Prime Minister Tayyip Erdogan said an accord with the International Monetary Fund was close and Turkey may receive some $20 billion to $40 billion in loans, Radikal newspaper reported on Thursday.

This signals an important shift in Erdogan’s stance towards the Washington-based fund as he previously slammed the IMF for demanding tougher cost cutting measures. The AKP government had desired to be the administration that ended the financial support of the IMF ahead of the local elections in 2009.

Turkey's $10 billion loan accord with the IMF expired in May and business leaders have been calling for a fresh agreement to boost the flagging economy.

"Talks are continuing. The conditions are on the verge of being agreed. There are not many problems remaining. There could be an agreement any moment," Radikal reported Erdogan as telling his AKP’s central executive board on Wednesday evening.

IMF Managing Director Dominique Strauss-Kahn said at the weekend the fund had not reached an agreement for a new loan deal with Turkey but that a package was close.

Turkey and the IMF have been locked in negotiations for fresh funding but disagreement on issues such as spending by municipalities has hampered progress.

Erdogan has said previously the government does not want to sign a new loan accord if the IMF program exerted excessive constraints on budget spending, taxes, economic growth and public investments.

But Ankara is under increasing pressure to reach an agreement as its economy slows sharply under the influence of the global financial crisis, which has forced Ukraine, Hungary, Iceland and Serbia to seek IMF financial aid.