Iran will miss its eight percent economic growth target because Hardliners are halting a vital economic liberalisation package, Iran's government spokesman Abdollah Ramazanzadeh said on Monday.
Hard-line parliamentarians on Sunday voted against moves to privatise banks, transport, telecommunications and information technology.
State carrier Iran Air was singled out for 49 percent privatisation.
Conservatives have also blocked foreign investment in the key energy and banking sectors.
"With these changes economic growth of eight percent is not achievable," Ramazanzadeh told a weekly news conference.
"The responsibility will rest with those who applied the changes, and in future, they must be accountable for the country's under-development," he added.
Reformist deputies, who lost their majority to conservatives in February's elections, had drawn up an ambitious five-year development plan (2005-2010) over the course of which they sought to average eight percent economic growth.
Gross domestic product growth in the year to March 2004 was 6.7 percent.
But this reformist plan was rejected by the Guardian Council, a hard-line watchdog.
By the time it returned to the parliament for revisions, newly-elected conservatives had taken up their parliamentary majority in May.
Conservative deputies justified their revisions on a much-debated article of Iran's constitution stipulating core sectors must remain in the hands of the state.
The Expediency Council, which arbitrates in political disputes, is examining ways to adapt laws to allow privatisation's without violating the constitution.
But parliamentarians said they could not give the current government the green-light until these changes are submitted.
Conservative parliamentarians also stopped moves to grant the running of airports to foreign companies.
This would prevent a Turkish consortium, which has already invested some $15 million, from continuing its work at Tehran's new international airport.
The unceremonious expulsion of the Turks from the airport by Iran's hardline military sent shivers through the investment community, and Turkcell is being slow to sign a $3 billion deal with Iran.
However, lawmakers have approved the privatisation of Iran's state-owned insurance companies and allowed foreign insurers to establish branches in the country.
Some analysts believe that hard-line parliamentarians could be deliberately denying the reformist government any economic success stories until the 2005 presidential elections, which their faction hopes to win.
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