Iran on Saturday overturned a key plank of the constitution to allow large-scale privatisations in a bid to overhaul the lumbering economy, over which many hardline parliamentarians have been trying to maintain state dominance.
The Expediency Council, Iran's top legislative arbitration body, gave the green light to privatisations in the downstream oil and gas sectors, mines, banking, insurance, telecommunications, railways, roads, airlines and shipping.
"In order to realise economic growth and development ... investment, ownership and management of these fields by private, co-operative and public sectors are permitted," a statement faxed to Reuters by the Expediency Council said.
Article 44 of Iran's constitution, written after the 1979 Islamic revolution decreed the core infrastructure must remain in the hands of the state.
The Expediency Council made no reference to radio and television which are catalogued in the constitution along with the sectors now earmarked for sale.
Upstream oil and gas and the airwaves for telecommunications will also remain in the hands of the state, news that will relieve parliamentarians who have said these must stay state-run in the interests of national security.
Several attempts by President Mohammad Khatami's government and the former reformist parliament to privatise key industries were blocked by the Guardian Council, a hardline watchdog that labelled the moves unconstitutional.
Supreme Leader Ayatollah Ali Khamenei, who has the last word on all state matters in oil-rich Iran, in June referred the debate to the Expediency Council. The council acts as a consultative wing for the leader in outlining key policies.
Saturday's decision is a final ruling on the constitutional legitimacy of privatisation but details have not been finalised.
Although hardline clerics sit on the Expediency Council, it also includes reform-minded ministers and pragmatic conservatives looking to shake up the economy.
Iran's 2005-2010 economic development plan envisages average economic growth of 8 percent a year over the five years, up from 6.7 percent in the year to March 2004. Iran's calendar runs from March to March.
Analysts dismiss the target as wildly optimistic and Iranian officials say it will not be realised unless the state ends its hegemony over the country's economy.
Hardline lawmakers opposed the privatisation of banks and insurance companies but in August gave the nod to a 49 percent sale of state-carrier Iran Air.
Iran's Privatisation Organisation on Wednesday said it would this month sell more than $570 million worth of state assets.
Government has a privatisation target of $5.95 billion in the year to March 2005, but this month's sales will be the first major step taken towards this goal.
Iran sold more than $1 billion worth of state assets in the year to March 2004.
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