The split within the clergy appears to be widening
A group of clerics in Iran has called Iran's presidential vote invalid, contradicting official results.
The pro-reform group's statement pits it against the top legislative body, which last week formally endorsed the re-election of Mahmoud Ahmadinejad.
On Saturday, former President Akbar Hashemi Rafsanjani said that post-election events had caused bitterness.
Britain said one of two UK embassy employees detained for "inciting protests" would be released.
Hundreds of thousands of people took to the streets in the aftermath of the poll to protest at what they alleged was a fraudulent election.
The protests died down after the authorities deployed lethal force, killing at least 20 demonstrators. More than 1,000 were arrested.
On Sunday, state news agency Irna quoted Iran's police chief as saying about two-thirds of those arrested had been released.
The authorities have blamed the West, in particular the UK, for fomenting the unrest through the use of the media, including BBC Persian television which broadcasts to the country via satellite.
The head of Iran's judiciary, Ayatollah Mahmoud Hashemi-Shahroudi, has said "those who co-operate with such websites and television channels will face prosecution".
On Sunday, Iran's foreign ministry said a British-Greek journalist working for The Washington Times - who had been arrested in connection with "recent street riots" - had been released.
The pro-reform clerics group said in a statement that the top legislative body, the Guardian Council, no longer had the right "to judge in this case."
In a statement to the press, the Assembly of Qom Seminary Scholars and Researchers said some members of the Guardian Council had "lost their impartial image in the eyes of the public."
Mr Rafsanjani is a possible mediator in the election dispute
"How can one accept the legitimacy of the election just because the Guardian Council says so? Can one say that the government born out of the infringements is a legitimate one," it said.
The Guardian Council is an unelected 12-member council made up of six religious leaders, appointed by the supreme leader, and six jurists.
The statement is further proof of a split at the top of Iran's establishment, correspondents say.
They say that in particular, it was an act of defiance against the country's supreme leader Ayatollah Ali Khamenei.
The group said the Guardian Council had not paid "attention" to the complaints lodged by the defeated candidates Mir Hossein Mousavi and Mehdi Karroubi, and urged other clerics to back them in calling the election and the new government illegitimate.
On Saturday, Mr Rafsanjani - an influential figure in Iranian politics and a prominent backer of Mr Mousavi during the election - met with the families of some of those who have been detained.
It was the first time he had spoken publicly since the election. He told the families that nobody with a "vigilant conscience" could be satisfied with the current situation.
"I hope with good management and wisdom the issues would be settled in the next days and the situation could improve ... We should think about protecting the system's long-term interests," Mr Rafsanjani said.
A BBC correspondent said that Mr Rafsanjani appeared to be hinting that a process was going on behind the scenes, which might resolve the current crisis.
Separately, one of the two British embassy staff still in custody in Iran was expected to be released on Sunday, according to the Foreign Secretary David Miliband.
Nine Iranians employed by the ambassador in Tehran were arrested and accused of stirring up unrest after the disputed presidential election.
There was concern on Friday when a senior Iranian cleric said some of them would be put on trial.
Mr Miliband told the BBC that efforts were now focused on securing the release of the last employee being held.
Tehran has repeatedly accused foreign powers - especially Britain and the US - of stoking unrest after the election.