Iran's culture minister, Ataollah Mohajerani, has resigned in a move which observers claim will have serious consequences for the country's freedom of expression.

Mohajerani, who had held the post since Iran's pro-reform president Mohammad Khatami came to power in 1997, was credited with encouraging creative and political freedom in Iran's cinema, media and arts. However his bold stance angered the president's conservative opponents as well as Iran's supreme leader Ayatollah Ali Khamenei.

Khatami had twice previously turned down Mohajerani's resignation, in April and October this year, but is thought to have been under too much pressure from the conservatives to resist a third time. He has appointed former deputy minister of culture and Islamic guidance, Ahmad Masjed Jamei, as caretaker of the ministry.

Since his resignation Mohajerani has been given a post heading up the President's Organisation for Dialogue Among Civilisations. However he is also being investigated by the Tehran justice department in connection with alleged misappropriation of Hajj pilgrimage funds.

Mohajerani is the third key ally that president Khatami has lost in the run up to Iran's parliamentary elections next June.