PRESIDENT Ahmadinejad of Iran suffered a setback when parliament rejected his third nominee as oil minister.

The clash emphasises a rift in the country’s conservative ranks that is paralysing the Government. Pragmatic conservatives, including powerful regime figures, fear the new President’s inexperience and zeal are damaging the country.

The oil ministry of Opec’s second biggest producer — Iran produces 2.4 million barrels of oil a day — has been rudderless since August. Oil accounts for 80 per cent of Iran’s public revenues.

Nearly two thirds of the deputies present in parliament, which is controlled by hardliners and conservatives, voted against Mohsen Tasalloti. Unlike Mr Ahmadinejad’s two previous choices, rejected for lack of oil experience, Mr Tasalloti was the director of a petrochemical development zone, but was dogged by personal allegations. He has denied that he had a US green card and that his daughter is a British citizen.

Parliament wants a minister with oil experience, according to David Knott, Iran editor of Middle East Economic Survey, the authoritative newsletter, but has been irked that the President has not consulted it before nominating Cabinet candidates, who are seen as ultra-conservatives who share his background in the Revolutionary Guard.

“Some Iranians say he closes his ears to things that don’t fit in with his way of thinking. He’s very doctrinaire . . . guided as much by religious principles as anything,” Mr Knott said.

Oil was central to Mr Ahmadinejad’s election campaign and he wants an ideological ally as oil minister. He promised to distribute oil wealth more fairly, favour domestic investors and rid the industry of the “mafias” he says run it.

Mr Ahmadinejad’s victory in the June elections meant conservatives held all the levers of power, but expectations of smoother decsion-making remain unfulfilled. Hashemi Rafsanjani, a key rival and the regime’s most influential pragmatic conservative, recently accused the President of damaging “national unity and solidarity”. Mr Ahmadinejad has purged moderate government officials, dismissed the heads of state banks and sacked or re-assigned key ambassadors.

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