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Turkmenistan on Friday adopted a new constitution designed to improve the isolated Central Asian state's democratic credentials and assure investors of its economic openness.

Gas-rich Turkmenistan is at the centre of Europe's plans to diversify energy sources and some political analysts and rights groups have challenged its resolve to implement democratic reforms since the death of absolute ruler Saparmurat Niyazov in 2006.

Under the constitutional changes announced on Friday, Turkmenistan abolished a Niyazov-era legislative body whose 2,500 delegates were hand-picked by the president, and transferred its powers to an elected 125-member parliament.

"Old laws no longer match the new stage of our development," said President Kurbanguly Berdymukhamedov.

Berdymukhamedov, who came to power after Niyazov's death, has distanced himself from his predecessor's rule and pledged to turn Central Asia's biggest gas producer into an open and investor-friendly country.

Niyazov ruled Turkmenistan for 21 years as his personal fief and tolerated no dissent. Accused by the West of allowing human rights abuses, he showed little interest in attracting foreign investment to his former Soviet country.

The new constitution vows to respect property rights and market economy principles -- a welcome signal for Western investors seeking a share of its energy resources.

It enlarges parliament to 125 seats from 65. Berdymukhamedov said an election for the new members would take place in December, monitored by international observers.

The new constitution fixes the presidential term at five years and gives the Turkmen leader some of the powers previously held by the disbanded legislative body, such as appointing regional governors.

Despite state efforts to promote a more liberal image, Turkmenistan remains classified, with North Korea, as the world's worst violator of press freedom by Reporters Without Borders.

It is still off-limits to most Western reporters, and domestic media never criticise state policies.

Reuters