Iran's top arbitration body has approved a $5 billion withdrawal from the country's rainy-day oil fund, ending a heated political tussle over the issue, the official IRNA news agency reported on Wednesday.
Iran's hard-line Guardian Council watchdog last week rejected a parliamentary proposal to allow the government to withdraw $6.5 billion from the Oil Stabilisation Fund, which is meant to protect the economy from sharp oil price fluctuations.
But the reformist-dominated parliament insisted the legislation be sent to the Expediency Council, a body that arbitrates between the parliament and the Guardian Council.
The arbitration body approved a $4.5 billion withdrawal suggested by the government, but cut parliament's proposal for an additional $2 billion to $500 million, which is to be used to pay state debts to the banking system.
Although it is not the first time the government has asked permission to tap the fund, conservative politicians have accused reformists of trying to "suck up the fund" before they hand over parliamentary control to their rivals who won elections last month.
The government withdrew $5.4 billion from the fund in the year to March 2004 to pay debts to state employees, regulate foreign exchange and accelerate development projects.
Established in 2000, the Oil Stabilisation Fund receives oil revenues in excess of an annually-set target. The government is only supposed to withdraw funds if oil revenue falls below target or to fund capital investment.