* Teenager's death sparks unrest in cities across Turkey
* Tens of thousands gather for funeral in Istanbul
* Erdogan still seen prevailing at elections (Adds Erdogan comments, police intervention)
By Dasha Afanasieva and Ayla Jean Yackley
ISTANBUL, March 12 (Reuters) - Riot police clashed with demonstrators in several Turkish cities for a second day on Wednesday as mourners buried a teenager wounded in protests last summer, unrest which a defiant Prime Minister Tayyip Erdogan cast as a plot against the state.
Police fired water cannon, tear gas and rubber pellets on a major Istanbul avenue to stop tens of thousands of people chanting anti-government slogans from reaching the central Taksim square. There were similar scenes in the centre of the capital Ankara and in the Aegean coastal city of Izmir.
Berkin Elvan's death on Tuesday after nine months in a coma touched off the worst unrest in Turkey since the nationwide anti-government demonstrations last June, adding to Erdogan's woes as he battles a graft scandal that has become one of the biggest challenges of his decade in power.
Crowds chanting "Tayyip! Killer!" and "Everywhere is Berkin, everywhere is resistance" held up photos of the 15-year-old as his coffin, draped in red and covered in flowers, was carried from a "cemevi", an Alevi place of worship, through the streets of Istanbul's working class Okmeydani district for burial.
Alevis are a religious minority in mainly Sunni Muslim Turkey who espouse a liberal version of Islam and have often been at odds with Erdogan's Islamist-rooted government.
Her voice hoarse with tears, Elvan's mother Gulsum cried out "What am I to do now? They've taken my everything," after his coffin was lowered into the ground at a leafy hill-top cemetery.
Erdogan, campaigning around the country for March 30 local elections, failed to comment on Elvan's death at two campaign rallies on Wednesday, railing instead against the protesters and saying they would be silenced at the ballot box.
"Trying to set fire to the streets 18 days before elections is not a democratic stance," he told throngs of supporters at a rally in the southeastern city of Mardin.
He accused a coalition of "anarchists, terrorists and vandals" as well as the opposition and an influential U.S.-based Islamic cleric of stoking unrest to undermine him.
"Scenarios are being prepared to shatter the peace. They are implementing new provocations to stir up the streets," he said, calling on Turks to be vigilant against such "provocations".
Those attending the protests said Erdogan's silence on Elvan's death, in contrast to President Abdullah Gul and other public figures who issued messages of condolence, highlighted how out of touch he was with a large segment of Turkish society.
"The lack of compassion, the polarising attitude ... and the fact he behaves like an autocrat is what brought us here," said Emre, 32, marching with his father-in-law.
The funeral ceremony was broadcast live on major television news channels, some of which had been criticised for their scant coverage of last June's unrest.
Elvan, then aged 14, got caught up in street battles in Istanbul between police and protesters on June 16 while going to buy bread for his family. He became a rallying point for government opponents, who held vigils at the Istanbul hospital where he lay in intensive care from a head trauma believed to have been caused by a police tear gas canister.
Skirmishes on Tuesday following his death spread to cities including Mersin on the Mediterranean coast, Samsun on the Black Sea and the southern city of Adana.
On Wednesday, Istanbul protesters hurled firecrackers behind police lines, while hundreds of people, including bystanders caught up in the melee, took refuge in a shopping mall and a hotel lobby as police fired tear gas and pepper spray.
Protesters stood by fires at barricades blocking roads around the poor Okmeydani neighbourhood. Signs on shop windows said stores would remain shut for two days, while traders sold black and white flags bearing Berkin's face.
Two labour unions called a one-day strike while professors at some universities announced they were cancelling classes.
In the eastern province of Tunceli, which has an Alevi majority, around 1,000 school children marched across town and staged a sit-in in front of the offices of the ruling AK Party.
The uncertainty in the run-up to elections has rattled Turkish investors, with the lira languishing at its weakest in five weeks, but has shown little sign so far of seriously weakening Erdogan, fiercely popular in the conservative Anatolian heartlands after a decade of rising prosperity.
"The recent barrage of corruption allegations ... appears to have had little impact on Erdogan's electoral popularity, merely deepening the political divides in an already highly polarised society," said Wolfango Piccoli, managing director of research firm Teneo Intelligence.
"(But) the death of a child on his way to buy bread for his family is something that cuts across political divides and will have particular resonance amongst the urban and rural poor who form Erdogan's core support base."
Istanbul and Ankara have both seen protests in recent weeks against what demonstrators regard as Erdogan's authoritarian reaction to the graft affair, which has included new laws tightening Internet controls and handing government greater influence over the appointment of judges and prosecutors. (Additional reporting by Daren Butler, Can Sezer and Evrim Ergin in Istanbul, Jonny Hogg in Ankara, Ferit Demir in Tunceli; Writing by Nick Tattersall; Editing by Gareth Jones)