* Ocalan signalled Turkish captives could be released by PKK
* Peace plan envisages withdrawal of militants from Turkey
* More than 40,000 people killed in conflict (Adds PKK spokesman)
By Daren Butler
ISTANBUL, Feb 25 (Reuters) - Jailed Kurdish militant leader Abdullah Ocalan will call a ceasefire at the Kurdish New Year next month, moving forward a peace process with Turkey aimed at ending his group's 28-year-old insurgency, media reports said on Monday.
Prime Minister Tayyip Erdogan said a planned withdrawal of Kurdistan Workers Party (PKK) militants from Turkey after a ceasefire was established would begin the process of ending a conflict which has killed more than 40,000 people.
Erdogan, criticised in some quarters for negotiating with Ocalan - a man reviled by most Turks, called for national unity on peace efforts.
Ocalan, 63, has been holding peace talks with Turkey since last October and met a delegation of Kurdish politicians at the weekend on the island of Imrali near Istanbul, where he has been held in near isolation since his capture in 1999.
At those talks, he signalled the PKK may release state officials it is holding, according to a statement read by the politicians. Several newspapers on Monday reported details of a timetable to end the conflict.
"Ocalan will make a ceasefire call to the PKK at Newroz for a lasting peace," the liberal Radikal daily said, referring to the March 21 Kurdish New Year. The Yeni Safak newspaper, which is close to the government, carried a similar report. They did not disclose their sources.
Only a few Turkish officials are familiar with details of the negotiations and lawmakers from the pro-Kurdish Peace and Democracy Party (BDP) who visited Ocalan on Saturday only conveyed the brief statement from the PKK leader.
The timetable for ending the conflict envisages a gradual withdrawal of several thousand militants from Turkey after the ceasefire call and Yeni Safak said the PKK fighters would begin leaving Turkey between March and June.
"In principal, we always have been ... and still are ready for a peaceful and democratic solution of the issue," Roj Welat, a PKK spokesman based in northern Iraq, told Reuters in an email in response to written questions.
"We see the re-start of the talks with our leader in Imrali as an important and historic step. However, the speeches of Prime Minister Erdogan and the authorities do not show any sign of the will (needed) to solve the issue," he said.
He said the PKK was fully behind Ocalan but declined to comment on the talks, saying he had not seen a detailed report of what was discussed on Imrali over the weekend.
OCALAN PLAN SENT TO PKK
In his first comments since the weekend talks, Erdogan said on Monday that a militant pullout would be a turning point, followed by a process of bringing the guerrillas down from the mountains in northern Iraq where they are based.
"The withdrawal of terrorists in Turkey to a second country will mean the effective beginning of this process," he told reporters on his plane back from a trip to Dubai, acknowledging there were risks of a backlash against negotiating with Ocalan.
"If other sections of society share the risk we are taking, and the media is important in this, we will speed up our progress," Dogan news agency reported him as saying.
In return for the PKK measures, the government is expected to push through reforms extending the rights of a Kurdish minority numbering about 15 million out of a population of 76 million.
Last week the government sent a penal reform bill to parliament which is expected to result in the release of some of the thousands of Kurdish activists who are currently on trial accused of links to the PKK.
The PKK, which is designated a terrorist group by Turkey, the United States and European Union, launched its insurgency in 1984 with the aim of carving out a Kurdish state in southeast Turkey but has since moderated its goal to limited self-rule.
A 21-page record of the talks between Ocalan and the BDP was delivered to the PKK leadership in the Qandil mountains of northern Iraq on Saturday night and Ocalan's 61-page peace plan was being delivered to the PKK separately, Yeni Safak said.
It added that the PKK was expected to release several security personnel and officials which it holds this week, while its fighters in Turkey were ordered to keep away from military areas. There was no immediate comment from the PKK.
The PKK holds nine people, including soldiers and civil servants, according to the Diyarbakir-based Human Rights Association. (Additional reporting by Ayla Jean Yackley; Writing by Daren Butler; Editing by Nick Tattersall and Jon Hemming)