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CORRECTED-UPDATE 1-Iran parliament votes to consider halting subsidy reform plan

(Corrects to say parliament to consider halting reform, nothalted it)

DUBAI, Oct 7 (Reuters) - Iran's parliament voted on Sundayto consider suspending plans for further reform of the country'sfood and fuel subsidies, with legislators citing economic paincaused by the plunge of the rial currency, Iranian mediareported.

Subsidy reform has been a centrepiece of the economicpolicies of President Mahmoud Ahmadinejad, so parliament's votewas a political blow to the president at a time when he facesgrowing public discontent over the rial's slide.

Of 240 members of parliament present, 179 voted to considerwhether to halt the second phase of subsidy reform, according tothe Iranian Labour News Agency (ILNA). It did not say when thedecision would be made.

The reform aims to ease pressure on state finances bycutting tens of billions of dollars from the amount which thegovernment pays to subsidise low consumer prices for food andfuel, while offsetting the impact on Iran's poorest citizens bygiving them monthly cash payments.

"In conditions in which the inflation rate is increasing andthe currency market is in disorder, the second phase of this lawmust be stopped," said Gholamreza Mesbahi-Moghaddam, head ofparliament's budget and planning committee and author of themotion, according to parliamentary news agency Icana.

The government introduced the first stage of subsidy reformin late 2010. At the time, Ahmadinejad called it the "biggesteconomic plan of the past 50 years".

But domestic critics including many members of parliamentsay the reform has contributed to soaring inflation, whichaccording to the government is running at around 25 percent, andhas been used by Ahmadinejad for his own political benefit,because he can control welfare payments under the scheme.

(Reporting by Yeganeh Torbati; Editing by Andrew Torchia, RonAskew)

((yeganeh.torbati@thomsonreuters.com)(+971 50 698 8495)(ReutersMessaging: yeganeh.torbati.thomsonreuters.com@reuters.net))

Keywords: IRAN ECONOMY/