Tehran was a tinderbox last night after government paramilitaries started shooting following a huge public protest against last Friday’s disputed re-election of President Ahmadinejad.

Members of the Basij, a force of young Islamic hardliners, killed one demonstrator and wounded several more when their building was attacked as tens of thousands of protesters dispersed from a rally against election fraud held in defiance of a government ban.

In another incident a witness told The Times how she watched from her car as riot police on six motorbikes opened fire on youths walking under a bridge after the rally. “The riot police started shooting them with big guns,” she said. “It wasn’t like the films where there is just a small hole — the shooting was blowing off hands, limbs. It was terrible, terrible.”

Gunfire was heard in at least three other districts of the Iranian capital. The Ministry of the Interior was rumoured to have authorised the use of live ammunition as the regime struggled to maintain control. Supporters of the defeated candidate, Mir Hossein Mousavi, fought running battles with the police and Basiji, who have flooded into Tehran.

Mr Mousavi emerged from hiding for the first time since the election results were announced to address the rally. He told the crowd packed into Azadi (Freedom) Square: “God willing, we will take back our rights.” Newly emboldened, the protesters brought out their green ribbons and bandanas and chanted: “Mousavi we support you”, and “We will die, but retrieve our votes”. The show of strength boosted Mr Mousavi’s supporters, who have called for another rally and a general strike today. Demonstrations have also been reported in the cities of Esfahan, Shiraz, Mashad and Ahvaz

The regime showed its first sign of alarm when Ayatollah Ali Khamenei, the Supreme Leader, who at the weekend hailed the result as a “divine assessment”, instructed the Guardian Council of 12 senior clerics to investigate allegations that the election was rigged. However, the move was seen widely as a ruse to buy time.

The regime’s violent response to the biggest political crisis in the Islamic Republic's 30-year history has triggered a growing international backlash. Gordon Brown warned Iran that the way it responded to legitimate protests would affect its relations with the rest of the world. David Miliband, the Foreign Secretary, expressed concern at “what seems to be state violence against its own people”.

President Obama said he was “deeply troubled” by the violence, and Ban Ki Moon, the UN Secretary-General, urged the regime to respect the “genuine will” of the Iranian people.

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