Instead of reaping credit for attacking Italy for its failure to extradite Mr Ocalan, Mr Yilmaz is embroiled in a scandal over the sale of a state- owned bank.
Last week, after a fiery debate, Turkey's parliament voted heavily in favour of proceeding with a no-confidence motion against his minority coalition. The vote is scheduled for Wednesday, and Bulent Ecevit, the Deputy Prime Minister, has already conceded that the government "will probably fall".
Mr Yilmaz is making the most of the upwelling of popular anger against Italy, where Mr Ocalan has now been freed from detention, but that is unlikely to save his coalition.
Yesterday, he again threatened Italy for allowing the courts to free Mr Ocalan: "The Italian government ignorantly opened its arms to the world's bloodiest terrorist. Turkey will not leave it unanswered," he said.
Italy says its constitution prevents it from sending anyone for trial in a country where they could face the death penalty. Mr Ocalan may yet be sent to Germany where he is also wanted by the authorities. He had arrived in Italy from Russia earlier this month.
Mr Yilmaz's troubles began in August, when Alaattin Cakici was held in France. Although he had been on the run for years, just like the Kurdish rebel leader, Cakici is from a different mould: a millionaire crime boss noted for his elegant manner and links with Turkish ultra-nationalist terrorists, he is accused of intimidation and murder in Turkey. Although Turkey's attempt to extradite him failed, the French jailed him for passport offences.
Soon afterwards, damaging tape-recordings of Cakici's prison telephone conversations with Turkish politicians and business leaders began to surface. One minister was forced to resign after a tape appeared to prove he had helped Cakici evade capture. But it was a recording of the crime boss's conversations with Korkmaz Yigit, a Turkish construction magnate, that are in the process of undoing Mr Yilmaz.
Mr Yigit is a man who came from nowhere. Virtually no one outside the construction industry had heard of him until August when his business empire suddenly expanded with the purchase of Turk Ticaret Bankasi (Turkbank) from the state for pounds 360m. One of the Cakici tapes seemed to provide the explanation, revealing that Mr Yigit had enlisted the mafia leader's help in scaring off rival bidders for Turkbank.
The sale of the bank was suspended and Mr Yigit was arrested last week. He left behind a political bomb, however. The day after his detention, his two television stations broadcast a dramatic pre-recorded statement in which the disgraced businessman claimed it was Mr Yilmaz who was behind his purchase of Turkbank. He said the Prime Minister and a senior minister provided funds from state-owned banks.
Mr Yilmaz has denied the accusations, claiming the allegations were a mafia plot.
Mr Yilmaz had hoped the Kurdish leader's arrest would be enough to save his government, but opposition parties have pressed ahead with moves to unseat him.Reuse content