By the BBC Middle East correspondent Jim Muir

The mayor of Tehran, Gholam Hussein Karbaschi, may have looked as though he had not slept for a while, but he put up an extremely spirited defence.

After listening to the corruption charges laid against him, he rose and did battle with the white-turbaned and bearded judge presiding over the court in the Iranian capital.

Mr Karbaschi, a leading figure in the reformist camp within the Iranian regime, vehemently denied all the charges, describing them as absolute lies.

He engaged the judge in a long and heated dispute over whether the previous court and this one had competence in the case.

Questioned in detail over allegations that municipal funds had been diverted for personal and political purposes, he answered adamantly that no wrong-doing had taken place.

Trial attracts huge interest

This case, which was adjourned until Thursday, has stirred nationwide and indeed international interest.

The courtroom was jammed with reporters and cameramen and hundreds of other people crowded in outside rooms to watch the proceedings on closed-circuit television.

Mr Karbaschi is a well-known public figure here, popular for his work as mayor, in which position he is deemed to have improved life in the city for many people.

The arrest in April of this leading reformist triggered a furore among the moderates. He was instrumental in helping to bring about the landslide election victory of President Mohammed Khatami last year.

His supporters saw this prosecution as an act of revenge by the hardliners who dominate the judiciary.