Iran's most senior dissident cleric is to be freed from house arrest after a decision by the country's top security body, the official Iranian news agency has reported.

The order is expected to be implemented in the next two days, government sources said.

Ayatollah Hossein Ali Montazeri, once designated as the Islamic republic's next supreme spiritual leader, has been confined to the central holy city of Qom since November 1997.

My father has not asked for any pardon and has not given any promises Ahmad Montazeri

The move comes after more than 100 Iranian MPs called for the release of the ailing 80-year-old on health grounds.

No reason was given for the decision by Iran's Supreme National Security.

The BBC's Tehran correspondent Jim Muir quotes sources close to the cleric as denying he had agreed to be silenced in return for his liberty.

A son of the cleric, Ahmad Montazeri, told Reuters news agency that his father had made no deal with the authorities.

"My father has not asked for any pardon and has not given any promises," he said.

"My father's health is better than last week, but he is old and he has a bad heart," he added.

Khomenei's 'heir'

Iranian conservatives, who largely control the judiciary, first called for an end to Ayatollah Montazeri's house arrest last week with an article in Resalat newspaper.

Another conservative paper, Jomhuri-ye Eslami, argued on Monday that, under house arrest, the cleric was a "substantial propaganda tool" for reformists.

Ayatollah Montazeri was placed under house arrest after he criticised the authority of Iran's supreme leader, Ayatollah Khamenei.

At one time, he had been designated heir to the late Ayatollah Khomeini, the leader of Iran's Islamic revolution in 1979.

Khomeini once described him as "the fruit of my life" but the liberal cleric fell out of favour as early as 1988 - a year before Khomenei's death - when he criticised the execution of political prisoners and human rights abuses.

Correspondents say that even under house arrest, he has remained an influential figure, regularly issuing statements from his home criticising the religious hierarchy and calling for pluralism and tolerance.

Newspaper ban lifted

In a separate development, a Tehran court has lifted a temporary ban on best-selling newspaper Hamshahri after the plaintiffs in the case withdrew their complaint.

The 10-day ban was imposed last week by the judiciary because the paper failed to publish a response from a union leader to an article criticising him.

The plaintiffs came from one of Iran's less radical reformist parties, Labour House.

Correspondents say they had not intended their suit to lead to the suspension of the newspaper, which is generally regarded as taking a reformist, but not radical, line.

The complaint was withdrawn after a reply to the original article was published in another newspaper.

Correspondents say it is unusual for a reformist paper to be suspended following complaints by reformists.