The future of Turkey’s Prime Minister Ahmet Davutoglu was hanging in the balance Wednesday as the ruling Justice and Development Party (AKP) prepared to head into an extraordinary congress that could signal his exit as premier.

The future of Turkey's Prime Minister Ahmet Davutoglu was hanging in the balance Wednesday as the ruling Justice and Development Party (AKP) prepared to head into an extraordinary congress that could signal his exit as premier.

Davutoglu, who is also party chief, had earlier held an over 90-minute meeting with President Recep Tayyip Erdogan that media had described as critical for the premier's future, amid reports of a split between the two leaders over key policy areas.

Davutoglu, who was longtime foreign minister under Erdogan's premiership, has sought to defeat predictions he would be a puppet on becoming prime minister in August 2014 by carving out his own profile.

No official statement was released after the meeting at Erdogan's presidential palace in Ankara. However, CNN-Turk and NTV news channels reported Wednesday that the congress is to be held later this month.

Calling of the meeting is key because it will allow for the election of a new party head. According to AKP convention, the posts of party boss and head of government always go to the same person.

Davutoglu will hold a news conference on Thursday following a gathering of the party's central executive committee beginning at 0800 GMT, the official Anatolia news agency said.

The executive committee will take the formal decision on holding an extraordinary congress which would then decide on the new party leader, reports said.

Prominent Turkish commentator Abdulkadir Selvi, who writes for the Hurriyet daily, told CNN-Turk that according to his information Davutoglu would not be a candidate for the party leadership at the congress.

If this became reality, it would mean that Turkey is heading for a change of premier at a time when Ankara is implementing a key deal on refugees with the EU and battling Kurdish militants.

The possibility of tumult at the top of Turkish politics at a critical moment unnerved financial markets, with the lira losing 3.7 percent in value against the dollar to trade at 2.95 lira to the greenback.