Representatives for the thousands camping out in Gezi Park said they rejected Erdogan's offer to leave the park in return for a referendum on its planned redevelopment, after the fight to save the site snowballed into the biggest challenge to the Islamic-rooted government's decade-long rule.
"We will stay in Gezi Park with all our demands and sleeping bags," Taksim Solidarity, the core group behind the campaign, said in a statement.
Four people have died and some 5,000 of the demonstrators, most of whom are young and middle-class, have been injured in two weeks of unrest across Turkey.
"We did not suffer through the attacks... So that a referendum could take place," the statement added.
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After labelling the protesters "vandals" and "extremists", Erdogan yesterday made his first concession by suggesting a popular vote on plans to build a replica of Ottoman-era military barracks in Gezi Park, which borders Istanbul's Taksim Square, if demonstrators pulled out of the green patch.
"I'm making my last warning: mothers, fathers please withdraw your kids from there," the premier said in a live television broadcast. "Gezi Park does not belong to occupying forces. It belongs to everybody.