UPDATE 1-Turkey to spend $1.83 bln on mainly Kurdish region

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ANKARA, May 6 (Reuters) - Turkey will spend 2.3 billion lira ($1.83 billion) this year to develop the impoverished and restive southeast region, including building dams and irrigation networks, Prime Minister Tayyip Erdogan said on Tuesday.

The investment is part of a 5-year plan to spend billions of lira in the mainly Kurdish southeast region as part of efforts to drain support from separatist Kurdistan Workers Party (PKK) rebels.

"A great campaign is being started to complete the southeastern Anatolian project," Erdogan said, addressing his party's deputies in parliament.

Erdogan said 1.3 billion lira of the spending for the project, known as GAP, would come from the unemployment insurance fund and 1.0 billion lira from the privatisation fund.

He said the AK Party government would allocate 3.5 billion lira in 2008 to 2013 to spend on GAP, coming from the two funds.

The European Union, which Turkey aims to join, has urged Ankara to to boost the language and cultural rights of its Kurdish citizens and to do more to develop the economy of the southeast, long hamstrung by the PKK conflict.

Ankara blames the PKK for the deaths of nearly 40,000 people, mostly Kurds, since the group began its armed campaign for an ethnic homeland in southeast Turkey in 1984.

Turkey has intensified its military offensive against PKK rebels inside the country and across the border in northern Iraq in recent months.