Mahmoud Ahmadi-Nejad on Monday proposed a 17 per cent spending increase in Iran’s annual budget in a move seen as an attempt to bolster his government’s populist policies ahead of presidential elections in 2009.

The president presented the budget to Iran’s parliament in a new format that will give authority and flexibility to ministers and governor generals in 30 provinces to decide how to spend their share of the 274,500bn rials ($292bn, €199bn, £148bn) budget. The changes made it more difficult to make a like-for-like comparison with the current year's spending.