President Mahmoud Ahmadinejad has appointed his controversial aide Esfandiar Rahim Mashaie as the country's new first vice president, the official IRNA news agency reported.

"Ahmadinejad has announced that Mashaie will serve as the new first vice president in the next government," IRNA said.

Mashaie a year ago was severely criticised by the country's hardliners and even rapped by supreme leader Ayatollah Ali Khamenei for saying Iran was a "friend of the Israeli people."

He returned to the theme again in August, saying he had "no hostility against the Israeli people."

Ahmadinejad also announced Ali Akbar Salehi, Iran's former envoy to the International Atomic Energy Agency, will be the country's new atomic chief.

Salehi replaces Gholam Reza Aghazadeh who resigned three weeks ago from his post as the head of Iran's Atomic Energy Organisation.