Turkish prosecutors have completed the first indictment in a graft scandal that has rocked the government of Prime Minister Recep Tayyip Erdogan amid a worsening political crisis gripping the country, local media reported Friday.

The indictment covers 21 people, including the mayor of Istanbul's conservative Fatih district, Mustafa Demir, the reports said, without naming any other people.

Prosecutor Ekrem Aydiner completed the allegations, which will now be sent to the courts for formal approval, the private Dogan news agency reported.

The graft probe has become one of the largest challenges to Erdogan's 11-year rule and comes as his Justice and Development Party (AKP) faces pivotal municipal elections on March 30.

Violent anti-government protests against what rights groups claim are heavy-handed police tactics against demonstrators have also piled pressure on Erdogan's administration.

Riots erupted Wednesday that left at least two people dead as tens of thousands turned out to mourn the death of a teenage boy who was hurt during violent clashes with police last year.

The indictment Friday accuses 21 people of "bribery," "fraud in documents" and "violating a law on the conservation of cultural and natural property," Dogan reported.

The scandal first erupted in December, when dozens of Erdogan's key allies were detained in police raids, including the sons of three cabinet ministers who have since resigned.

The controversy has since widened to implicate Erdogan himself, after alleged recordings were leaked of him discussing hiding large sums of cash and conspiring to extort a bribe from a business associate a day after the arrests.

Erdogan has retaliated by sacking hundreds of police and prosecutors believed to be linked to exiled Muslim cleric Fethullah Gulen, who he says is using his influence over the police and the judiciary to destabilise his government.

Last month a Turkish court released the last suspects implicated in the probe ahead of expected trials, including the son of the former interior minister, Baris Guler, and the son of the ex-economy minister, Kaan Caglayan.

Demir was released in December after briefly being detained as part of the investigation.