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Iranian opposition leader Mirhossein Mousavi has criticised a government plan to phase out state energy and food subsidies, saying it would further increase consumer prices in the major oil producer.

His criticism highlights potential political problems facing hardline President Mahmoud Ahmadinejad's administration in implementing the bill to gradually end subsidies on goods such as gasoline and basic food stuffs over the next five years.

"Subsidies are paid in all world economies ... Those who reason that the subsidies are bad and must be eliminated ... are wrong," Mousavi told his Kaleme web site.

Mousavi came second in a presidential election in June in which Ahmadinejad won a second four-year term. The moderate opposition says the vote, which sparked widespread street protests, was rigged. Authorities deny the vote fraud charge.