Turkish President Ahmet Necdet Sezer has vetoed a controversial education reform package that would end state-sanctioned discrimination against pupils from religious and vocational high schools in the marking of university entrance exams. The move is a major challenge to the government of Prime Minister Recep Tayyip Erdogan, which had championed the new law.

However, with the powerful military and the country’s secular establishment lining up behind the president, the government appears to have stepped back from further confrontation.

“We will not clash with the values Turkey has accepted,” Mr Erdogan told party deputies on Tuesday. “We always consider the basic principles of the constitution.”

For the past five years graduates from such schools have stood virtually no chance of gaining university places. A modifier is applied to their scores by the examiners in the crucial entrance tests, drastically undermining their results.

But when parliament passed the new law last month it sparked fierce debate among Turkey’s teachers and parents and caused panic on the country’s financial markets. Investors feared a repeat of the 1997 “soft coup”, when generals unseated the Islamist-led government during another controversy over religious high schools, known as imam hatips. The row cuts to the heart of the battle over reforms required for Turkey to be considered for EU membership, because they include ensuring the military is accountable to the government and not the other way round.

Despite agreeing to many other recent reforms that weaken their power, the generals drew a line in the sand on this issue. They see themselves as guardians of this 99 per cent Muslim country’s secularism and fear a flood of religious students into universities would eventually change the nature of the state. “Circles and institutions...loyal to the basic characteristics of the Republic should not be expected to adopt that draft,” the General Staff said before the law was passed. But Mr Erdogan said he is acting on promises made to support the imam hatips during the 2002 general election, in which he won a hefty majority.

“These schools are not anti-secular,” he told a conference in Oxford last Friday. “I am a graduate of one of them and I am a protector of the secular state. This is about fair access and equal opportunity in education.”

He said imam hatip students study the normal high school curriculum over seven years instead of six in order to fit in additional Koranic study.

Unlike the madrassas or religious schools found in the Arab world or South Asia, these schools are co-educational and female students are not allowed to wear the traditional Muslim headscarf.