Myanmar will free many prominent political activists on Friday in an amnesty for 651 inmates, prison officials said, as one of the world's most reclusive states continues to open up after half a century of authoritarian rule.

The United States and Europe have said freeing political prisoners is crucial to even considering lifting economic sanctions that have isolated the former British colony, also known as Burma, and, over the years, pushed it closer to China.

Among those to be freed are Min Ko Naing, a leader of a pro-democracy uprising in 1988 in which thousands of protesters were killed, and Shin Gambira, a well-known Buddhist monk who led 2007 street protests, prison officials said.

Family members and prison officials said many more political activists, including other members of the dissident 88 Generation Students Group, would be released in the second major prison amnesty in four months.

Secluded Myanmar has initiated radical reforms since a civilian government was allowed to take power in March after almost half a century of rule by the military.

Media curbs have been eased, some prisoners freed and the government has initiated a dialogue with Nobel peace laureate Aung San Suu Kyi, who has led the fight for democracy and was herself released from years of house arrest in late 2010.

Last month, Hillary Clinton became the first U.S. secretary of state to visit Myanmar in more than 50 years and said Washington stood ready to support reforms in the country and possibly lift sanctions.

The next major step in the reform process will be April by-elections in which Suu Kyi and her National League for Democracy (NLD) will take part.

Authorities freed about 230 political detainees in a general amnesty on October 12. A senior political adviser to President Thein Sein told Reuters in November that hundreds of political detainees may soon be released.

UNCERTAIN NUMBERS

In Friday's amnesty, Min Ko Naing will be freed from Thayet Prison, a prison official and a member of his family told Reuters.

A top leader of the 1988 protests that the military crushed with heavy loss of life, he was arrested in 1989, released in 2004, and then arrested again in 2007 on charges of organising protests.

Shin Gambira was a leader of the All-Burmese Monks Alliance, which played a prominent role in street marches in 2007 that were again violently suppressed by the junta. He was 27 years old when he was sentenced in 2007 to 68 years in prison.

Shin Gambira will be freed later today, said a prison official in Myaungmya prison, southwest of the commercial capital, Yangon.

An official from Taunggyi prison in Shan State said two other prominent activists, Ko Jimmy and Ko Zaw Thet Htwe, would be freed there.

We are going to take them to the bus terminal later this morning, the official said.

Phyo Min Thein, brother-in-law of Htay Kywe, one of the leaders of the 88 Generation Students Group, said: I've got confirmation that Ko Htay Kywe and almost all members of the 88 Group and other prominent figures like Shin Gambira and U Khun Tun Oo will be released today.

The exact number of political prisoners behind bars is unclear.

Rights groups and the United Nations have put it at about 2,100. But Minister for Home Affairs Lieutenant General Ko Ko told U.N. Special Rapporteur Tomás Ojea Quintana in August the number was 600, or about 400 after the October 12 amnesty.

The Assistance Association for Political Prisoners (Burma), a group that tracks prisoners, had identified more than 1,000 political prisoners. But diplomats and some independent analysts question those numbers and say they depend on different definitions of political prisoners and whether rebels or those who used force to oppose the government are included.

A review of the AAPP's list of prisoners by European diplomatic missions in Thailand suggested the number of non-combatant prisoners of conscience appeared to be about 600, or about 800 before October's amnesty.

Rights group Amnesty International has dropped an earlier estimate of about 2,000 political prisoners due to the conflicting definitions.

(Reporting by Aung Hla Tun; Writing by Jason Szep; Editing by Alan Raybould and Robert Birsel)