The report suggests that if the government addressed the economic and social grievances of Turkey's 12 million Kurds, who make up about 20 per cent of the population, there would be less popular support for the armed rebels of the Kurdistan Workers' Party (PKK). More than 17,500 people have been killed since 1984 in a war in south-eastern Turkey between the armed forces and the PKK, which is seeking autonomy or full independence.
The report also airs the idea of elevating Kurdish to the status of a second official language, after Turkish, and even turning Turkey into a federal state to provide proper guarantees for Kurdish rights. It says a solution to the Kurdish problem lies in "dialogue with the Kurds, while excluding the PKK".
Such proposals would be warmly endorsed by many Western critics of Turkey's Kurdish policies, particularly in the European Parliament, which will decide in October whether to ratify a customs union agreed last March between Turkey and the European Union.
The report was commissioned by one of Turkey's most powerful business groups, the Union of Chambers of Commerce and Bourses, whose chairman, Yalim Erez, is close to the centre-right Prime Minister, Tansu Ciller. However, Mrs Ciller's office has issued a statement denying that she influenced the conclusions.
The report provided a rare insight into Kurdish public opinion by detailing the results of a survey of 1,200 Kurds. It showed that only 13 per cent of Kurds wanted an independent state, but 89 per cent supported turning Turkey into a federation and 63 per cent wanted Kurdish to have equal status with Turkish.
Ankara's state-security court is investigating whether there are grounds to prosecute the authors under the notorious Article 8 of the anti-terrorism law. This bans propaganda against the unity of the state.
While liberal intellectuals and newspaper commentators welcomed the report, the reaction of politicians in and out of government was overwhelmingly negative. The head of the opposition Motherland Party, Mesut Yilmaz, called it "something concocted by the CIA".
Sevket Kazan, a senior official in the Islamist Welfare Party, which controls municipal governments in Ankara and Istanbul, described the report as a "minefield" that could destroy Turkey's unity. This view was shared by the Interior Minister, Nahit Mentese.
From a different point on the political spectrum, the report was dismissed by the PKK as a ruse intended to drum up support in the European Parliament for approving the customs union. Members of the PKK's political wing said the armed forces were the only real power in Turkey and any solution would need the military's endorsement.
Meanwhile, Turkey's Western allies are reluctant to push the authorities too hard on their treatment of the Kurds for fear of generating a backlash from nationalists, Islamists or the armed forces.
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