Turkish lira is the currency they use although in most shops they will take stirling, not sure how they feel about the Euro but last time we were there it was also an accepted currency. Some of the best exchange rates for lira can be found in the jewellery shops.
The best thing to do is take a small amount of lira with you, say £50, and then either take sterling and change into lira as you get a higher exchange rate there, or withdraw lira from the ATMs over there.
You can use sterling to pay for trips and to buy clothes etc as you sometimes get a better rate that way.
I certainly wouldn't bother with euros as you could end up exchanging your money twice if they want lira.