The United States has accused Turkey of limiting freedom of expression in its annual human rights report and said journalists feared reprisals if they criticised Prime Minister Tayyip Erdogan's government.  The report comes amid an escalating row between the country's largest media group and government, and growing concerns over press freedom.

A senior executive at Turkey's largest media group Dogan Yayin expressed outrage at a news conference over the nearly half-a-billion-dollar tax fine imposed on the company. The media group was fined for penalties and back-taxes following an investigation by tax authorities, which they claimed was aimed at silencing critical reporting.

Some analysts say the fine was disproportionate for such an offense. Mehmet Ali Birand, who's a political columnist on one of the group's newspapers, has little doubt that the fine was payback by Prime Minister Recep Tayyip Erdogan for its increasingly critical reporting on him.

"This group was very instrumental in supporting the prime minister, but since the headscarf problem surfaced we changed our position," he said. "We saw he is becoming more dangerous for the system and then he changed his approach as far we are concerned as well. It is a big fight and we don't know where are heading to."

Tax investigators began probing the media group after its newspapers published details of a court case in Germany in which an Islamic charity was convicted of fraud. During the trial, leading Turkish officials close to the prime minister were linked to the crime.

Following those revelations, Mr. Erdogan engaged in a war of words with the group's owner Aydin Dogan and called for a boycott of his newspapers.

Nuerrtin Canikli parliamentary group leader of Erdogan's Justice and Development party dismissed any political motivation behind the tax fine.

"This investigation is completely subjective and fair," he said. "There is no interference from the prime minister or government. The tax office is completely independent from any political interference."

But such denials are being treated with skepticism both nationally and internationally. It is not the first time that a media group critical of the government has faced scrutiny. Another leading newspaper opposing the government is also reportedly under investigation by tax authorities.  

"When you place this penalty in the context of the past six months, when you remember the prime minister going from city to city asking people to boycott the papers, published by this particular company, one has to be extremely naive not to see any political motivation behind something like this," said Haluk Sahin,Professor of Media Studies at Istanbul's Bilgi University. "There is a history of tax men being used as an agent of pressure against the free person in the rest of the world as well as in Turkey."

Critics point out that none of the country's numerous media networks supportive of the government have faced such scrutiny. Concern over press freedom is also felt by the European Union, which Turkey is seeking to join.

"Part of Turkey conforming to European standards is to relax to become much more confident and allowing dissident and opposing political views however offensive they may be, it is part of being a modern democratic and pluralistic country and still think that is a lesson I still think we have long way to go in Turkey," said Richard Howitt, a member of EU committee on Turkey.

The Dogan Yayin group claims that it has sufficient reserves to pay the fine. But there are reports of further financial investigations into the group. And Mehmet Ali Birand says a climate of fear is emerging in Turkey among critics of the government.

"Everyone is going to be much more careful in what they are going to say, no criticism will be the order of the day," he said. "We will not able to say anything wrong which will be interpreted in a negative way from the prime minister, he is the king."

Prime Minister Erdogan has dismissed such concerns as nothing more than media hysteria, adding that everyone should pay their taxes. But many  investors in the Dogan Yayin group have sold stock in the company, causes its shares to tumble.