In the open courtroom packed with the press and public, the mayor vehemently denied the charges.

The BBC Middle East correspondent Jim Muir reports on the start of the trial

The mayor was arrested in April, but released after his detention caused a political furore amongst his supporters.

The country's supreme leader, Ayatollah Ali Khamenei, intervened to calm the political storm by ordering Mr Karbaschi's release.

Kissed in the street on his release

Mayor Karbaschi had been detained on the orders of the conservative-led judiciary who said they were investigating corruption in the Tehran municipality.

The mayor played an important part in the landslide election victory of the popular reformist President Mohhamad Khatami in 1997.

President Khatami won the vocal support of Mr Karbaschi

Mr Karbacshi 's supporters suspected that the humiliated hard-liners were out for revenge.

The BBC Middle East correspondent says it was thought that the affair, which sharply polarised the conservative and moderate trends within the Islamic regime, might be quietly brushed under the carpet following his release.

Vahe Petrossian of the Middle East Economic Digest discusses the case

The judiciary has, however, insisted on going ahead with the case raising the possibility that political tensions will again rise abruptly.