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Davutoglu attacked his former political ally in Friday's speech, saying power in Turkey was now too centralised under Erdogan and called for parliament to play a bigger role in running the country as he launched a new party.

"Those ruling Turkey have no agenda other than staying in power," he told supporters, according to Reuters.

"Despite all the pressure and the atmosphere of fear which they have tried to create...we have come together to set out a democratic and prosperous future for our country."

Davutoglu was once one of Turkey's senior political figures, serving as prime minister from 2014 to 2016 and establishing himself as one of the most high-profile names in the ruling Justice and Development Party (AKP).

Erdogan moved Turkey to a presidential system along with introducing a number of other measures that concentrated power in his hands, after a coup attempt in 2016.

These measures are something that Davutoglu said he opposed.

"The presidential system was constructed with the thought of transferring as much power as possible to the executive and increasing influence over the legislative and judiciary," he said.

Davutoglu left the AKP in September and this week announced the formation of the breakaway Future Party, adding that the economy was also in "deep crisis".

"Despite all the pressure and the atmosphere of fear which they have tried to create...we have come together to set out a democratic and prosperous future for our country," he added, saying Turkey needed a new constitution.

"We defend a democratic parliamentary system," he said.

Former deputy Prime Minister Ali Babacan also left the AKP this year and will establish a new party, sources told Reuters.

Neither party would pose much of a threat to Erdogan's power, but could take more key votes away from the AKP which has suffered a number of setbacks to Turkey's main opposition party in recent months.

Turkey is not due for another election until 2023.

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