ANKARA, Nov. 16 (Reuters) - Turkey reacted angrily on Thursday to a European Parliament resolution formally accusing Turkey of genocide against Armenians 85 years ago, and opposition leaders called for an investigation to clear the country's name.

"We propose launching a parliamentary investigation... with the aim of removing wrong and biased opinions," the main opposition Islamic Virtue Party said.

It added that parliament should consider recommending what it called necessary measures on the subject.

A similar "genocide resolution" backed by the Armenian lobby in the U.S.

Congress last month badly strained relations between Ankara and Washington. It was dropped only when President Clinton said its passage would damage U.S. security interests.

Turkey had threatened retaliation against Washington, including trade sanctions and possible withdrawal of military cooperation if the U.S. bill was passed.

The Strasbourg assembly passed the Armenian resolution on Wednesday, just a week after the European Union outlined to Turkey the political and economic changes it must make for membership talks to begin.

Armenia and an Armenian diaspora accuse Turkey of deliberately killing more than 1.5 million Armenians in eastern Anatolia as the Ottoman Empire disintegrated.

Turkey denies genocide accusations and argues that where killings occurred in the chaos of the collapsing empire, they were part of wider partisan fighting and all sides suffered.

"It is very important to deal with this issue in parliament. Such a national issue must definitely be discussed by our grand national assembly. It must be investigated and precautions to be taken must be established," Virtue Leader Reaci Kutan said in a written statement. He urged other parties to back his bid.

Virtue's proposal is due to be debated by the assembly in the next few weeks despite a busy schedule, observers say.

The EU motion does not oblige member states to take any action, but that made little difference to Turkish anger over the highly emotive issue.

"Ankara is angry. Europe exasperates us," said Sabah daily, while Cumhuriyet's headline labeled the move "an inappropriate resolution from the European Parliament."

The resolution, part of a series of European Parliament assessments of Turkish progress toward EU membership, also called for the withdrawal of Turkish troops from northern Cyprus -- another sensitive issue in NATO-member Turkey.

An editorial in the Turkish Daily News said the vote showed that Europeans were highly skeptical about the prospects of Turkey's starting membership talks with the bloc.

"It seems those in the European Parliament who do not want Turkey in the EU do not want to leave anything to chance. So they have unleashed a campaign to antagonize Turkey and force it to sever its links with Europe of its own accord," it said.