Larijani, a conservative but no natural ally of Ahmadinejad, is standing for parliament in March 14 elections and may appear on a list separate from that of hardliners loyal to the president.

In an interview with the ISNA news agency, Larijani warned over Ahmadinejad's expansionary economic policies which many economists see as the prime cause of the current high inflation in Iran.

"By throwing around money, we cannot have development," he said in rare comments on economic policy.

"Development will only happen if the production is done by the people. This will not be realised by throwing around money and increasing liquidity, this will only result in inflation."

Economists say the government has stoked inflation by ploughing cash into the economy to fund local infrastructure projects promised by Ahmadinejad on his provincial trips.

Larijani, who has on occasion shown a pragmatic streak, also made his most candid comments on the differences with Ahmadinejad that led to his resignation as top nuclear negotiator last year.

"We had differences in that issue, they were ideological differences," he said, referring to Iran's nuclear standoff with the West.

"I thought that the differences would be damaging and thus I resigned. I do not have any animosity towards anyone."

Larijani, who remains an influential figure as the representative of supreme leader Ayatollah Ali Khamenei on Iran's Supreme National Security Council, is tipped to head a list called the Broad and Popular Coalition of Principalists.

The coalition has been formed with his allies and those of two other heavyweight conservatives -- Tehran mayor Mohammad Baqer Qalibaf and ex-Revolutionary Guards chief Mohsen Rezaie.

Some observers have seen the list as a rival to the United Principalists Front conservative coalition, which includes allies of Ahmadinejad.

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