By Marcus George
DUBAI (Reuters) - Iranian parliamentary candidates began campaigning on Thursday for the second round of elections set to weaken President Mahmoud Ahmadinejad as he grapples with worsening economic problems.
Candidates allied to Iran's theocratic leader, Ayatollah Ali Khamenei, dominated the first round of elections in early March at the expense of those supporting Ahmadinejad. With more than 50 percent of seats filled by new members, the new parliament - which will convene in late May - will undergo radical change.
The Iranian state news agency (IRNA) reported that 130 candidates, allowed by law one week to campaign, had started contesting May 4's elections for 65 remaining.
The Iranian leadership proclaimed the election - the first since the disputed 2009 re-election of Ahmadinejad - as a national triumph against western conspiracies to weaken the Iranian theocratic system.
Analysts says the final shape of the new parliament will weaken Ahmadinejad but the president may still be able to draw on the support of 70 independent candidates.
Unsubstantiated reports in the Iranian media suggest some candidates allied to the president had registered as independents to avoid being barred from running by the Guardian Council - the powerful body that oversees elections.
In recent months the current parliament has given the president a tough time, mainly over his handling of the economy.
Last month, he was the first president in the history of the Islamic Republic to be summoned to parliament who interrogated him over the near-stagnant, high-inflation economy and concerns over his allegiance to Khamenei.
The outgoing parliament has continued to debate the government's proposed budget more than a month into the new Iranian year.
At issue is the second phase of Ahmadinejad's Targeted Subsidy Reform Plan which parliamentary critics say has been illegally implemented without parliamentary approval.
Last month the government announced an increase in the monthly cash payments without warning to offset the next phase of reforms the goal of which is to withdraw the estimated eighty billion dollars in government spending on subsidized goods and fuel.
Parliamentary speaker Ali Larijani wrote to Khamenei, describing the increased payments as "legally flawed" and adding that any amendments "must conform to the law".
While applauded by the International Monetary Fund, critics have accused Ahmadinejad of causing rampant inflation and using Iran's petro-dollars solely for political gain.
Earlier this month he visited the disputed island of Abu Musa which sparked a fierce exchange with the United Arab Emirates but widespread support from all Iranian political factions.
Both countries claim Abu Musa and two other small islands, located near key shipping lanes in the Strait of Hormuz at the mouth of the Gulf. Iran took control of the islands in 1971, shortly before the Gulf emirates gained full independence from Britain and formed the UAE.
(Reporting By Marcus George)