An appeal court in Iran has reduced a prison sentence passed on the powerful former mayor of Teheran, a close ally of the country's reformist president, Mohammed Khatami.

The mayor, Gholam-Hossein Karbaschi, who was convicted of embezzlement in July, had his sentence cut from five years to two years.

A flogging of sixty lashes was dropped, and heavy fines reduced -- and a ban on his holding public office was brought down from twenty to ten years.

Mr Karbaschi's case has been seen as part of a wider campaign by the conservatives against the moderates within the Iranian clerical regime.