He has also allegedly confessed that his Kurdish separatist movement was funded by Greek churches and pay-offs from drug smugglers.

Mr Ocalan is said to have made the admissions in a 36-page confession to Turkish prosecutors on the prison island of Imrali where he is being held.

The rebel chief, who has led an armed campaign for Kurdish self-rule in south-east Turkey, was captured in Kenya earlier this month. He is charged with treason and could face the death penalty.

Mr Ocalan was flown back to Turkey under heavy guard

Turkish prosecutor, Nuh Mete Yuksel, told the official Anatolia news agency, that Mr Ocalan admitted ordering the massacre on 15 August 1984 which marked the start of the war waged by his PKK rebels.

"Ocalan said that this attack was carried out in retaliation for the killings of those militants who were killed in prisons in 1982, and added that he repented and regretted the attacks," said Mr Yuksel.

He said Mr Ocalan denied the PKK was involved in drug trafficking, explaining that the organisation's funds were obtained from "churches in Greece and payoffs from drug smugglers".

Mr Yuksel, one of three prosecutors who interrogated Mr Ocalan on Imrali, is now working on the indictment which he says may take up to two months to complete.

Fanning the fire

The BBC Ankara Correspondent Chris Morris says the allegations that Greek churches helped fund the guerillas will increase the tension between the rival countries.

Chris Morris reports for BBC News

After Mr Ocalan's capture in Nairobi, it emerged he had been sheltering at a Greek diplomatic residence in Kenya.

Turkey on Thursday repeated its accusation that Greece has supported the rebels - a charge denied by Athens.

"Greece has emerged behind it," President Suleyman Demirel said, referring to the Kurdish conflict in Turkey's southeast.

On Monday, Mr Demirel warned that his country had a "right to self-defense" against any Greek support for the PKK.

Associated Press quoted Greek defence sources saying military units in the Aegean Sea and near the Turkish border were on their highest state of alert.

Political clampdown

The disclosures about Mr Ocalan's confession came as lawyers for the rebel leader had their first meeting with him since his capture.

Meanwhile, Turkey's chief prosecutor has called for the main Kurdish party, HADEP, to be banned from the country's April elections saying it has links to the PKK.

Vural Savas said there was information that rebels were threatening to kill people in the southeast unless they voted for HADEP.