The former president, Iran's most famous statesman Akbar Hashemi Rafsanjani, will now enter a head-to-head race against Mahmoud Ahmadinejad, the little known, ultra-hardline Tehran mayor, who emerged in a surprise second place. Ahmadinejad was almost half a million votes ahead of the third-placed Mehdi Karroubi, a moderate elderly cleric and former parliamentary Speaker.

The experienced Rafsanjani, the strong favourite during the campaign, has pledged better ties with the West, while Ahmadinejad, who appeals to the pious poor, is wary of re-opening talks with Washington. Rafsanjani won around 21 per cent of the vote. Ahmadinejad got 19.5 per cent.

Ahmadinejad's performance surprised many, as opinion polls had placed him well down the list of seven candidates. But his reputation as a man of the people fiercely loyal to Iran's system of clerical rule appeared to have won him strong support in rural areas and among the urban poor, for whom unemployment and the cost of living are the main concerns.

The leading reformist candidate, Mostafa Moin - who had hoped to finish second and force a run-off with Rafsanjani - finished fifth with 13.8 per cent, behind Mohammad Baqer Qalibaf, a former national police chief and Revolutionary Guards air force commander, who was previously considered the leading hardline candidate.

The Interior Ministry said 63 per cent of Iran's 47 million registered voters had voted. That figure was hailed as a triumph by the Supreme Leader, Ayatollah Ali Khamenei, who had called for a high turnout to display Iran's democratic credentials in the face of American and European pressure over its nuclear programme and human rights record.

'With your wise participation in the elections, you have once again announced your strong will to be independent, defend Islamic values and have an Islamic democracy,' Khamenei told voters. President George Bush denounced the election in advance last week as unfair.

Reformists, stunned by the poor showing of their favourite Mostafa Moin, a former education minister, debated whether to throw their weight behind Rafsanjani. Many of Moin's supporters had complained of having being assaulted and having their election meetings broken up by hardline vigilantes. Moin had promised to release political prisoners and review human rights.

At a hastily arranged news conference Ahmadinejad criticised opponents for spending large sums on slick television adverts and organising rallies featuring pop music and girls wearing skimpy dress considered immoral by religious conservatives.

'I am the people's candidate because people helped my campaign centres and in my campaign centres we did not spend billions (of Iranian rials),' he said.

Allegations of vote rigging abounded yesterday. 'I assume there will be others who smell a rat,' said Patrick Clawson, at the Washington Institute for Near East Policy.

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