Ahmadinejad remains caretaker oil minister: aide

TEHRAN (Reuters) - President Mahmoud Ahmadinejad remains Iran's caretaker oil minister, despite a ruling by the constitutional watchdog that he had no legal right to the post, ISNA news wire reported a vice-president saying on Sunday.

The report shows the conservative president has no intention of retreating from his move to personally oversee the Oil Ministry, criticised by adversaries as his latest step to accrue more power.

When asked by reporters whether Friday's ruling by the Guardian Council meant Ahmadinejad could not be the caretaker oil minister, vice-president Fatemeh Bodaghi said it did not.

"On this issue the government has already announced its decision and it has been settled and the president is the caretaker of the ministry," said Bodaghi, a vice-president in charge of legal affairs, according to the students news agency ISNA.

Ahmadinejad surprised his political rivals and international oil analysts a week ago when he announced that, as part of a plan to merge the Oil Ministry with the Energy Ministry, he would take over the portfolio for an interim period.

The move put him in personal control of the ministry that oversees the extraction and export of Iran's vast oil and gas wealth and would also see him represent the Islamic Republic at the next Organization of the Petroleum Exporting Countries, set for June 8 in Vienna.

Iran holds the rotating presidency of OPEC of which it is the second biggest crude producer.

Analysts said Ahmadinejad's presence at the OPEC meeting would dim any prospects of raising output targets to reduce the oil price as he would use the occasion to drive home Iran's hawkish stance on price.

His move also exacerbated tensions among the conservative factions in Tehran's corridors of power. The decision on Friday by the state's constitutional watchdog that it was illegal looked like he might be forced to back down.

By law the president has three months after removing a minister, in this case Oil Minister Massoud Mirkazemi, to introduce a new candidate to parliament. During that period he can act as caretaker himself or appoint someone to the post.

The Guardian Council has not set out its reasoning for the ruling and it was initially unclear whether Ahmadinejad would bow out of the caretaker minister role -- something which Bodaghi appeared to rule out.

Such a retreat would have been the second defeat on ministerial appointments in just a few weeks and risked adding to the sense voiced by some analysts that Ahmadinejad's grip on power was weakening.

Last month Ahmadinejad's decision to sack Intelligence Minister Heydar Moslehi was overruled by Supreme Leader Ayatollah Ali Khamenei, a rare public interference interpreted by analysts as an attempt to clip the president's wings.

(Reporting by Hossein Jaseb; Writing by Robin Pomeroy; Editing by Jon Hemming)