TEHRAN (AFP) - A top cleric and ex-presidential challenger has issued an unusual public warning over the state of Iran's economy.

Ali Akbar Nateq Nuri expressed concern that money supply growth and factional political bickering in the Islamic republic are spiralling out of control.

"If no economic plan is presented for the country, even if a barrel of oil costs 200 dollars, we will simply be faced with an increase in liquidity resulting in high prices and inflation," said Nateq Nuri, according to the ISNA news agency.

"There is a flood of liquidity in society. Wherever it appears it destroys," Nateq Nuri was quoted as telling a group of 100 MPs.

Inflation is currently one of the hottest topics in Iranian politics amid a spike in prices of basic goods and warnings by economists that high money supply growth indicates prices will rise further.

According to the research centre of parliament, money supply in Iran is set to rise 41 percent in the current Iranian year to March 20, with inflation hitting 23.4 percent.

Nateq Nuri was the conservative candidate who was heavily beaten by Mohammad Khatami when the reformist won Iran's presidential elections by a landslide in 1997.

He lamented that human resources were being wasted with skilled officials at ministries who were currently out of political favor losing their jobs to less adept allies of those in power.

When Ahmadinejad became president in 2005, dozens of experienced officials at key ministries such as foreign affairs and oil were moved out and replaced by people closer to the sympathies of the president.

"In our country, if a political party wins they take the losers in a minibus out of the organizations (they worked for) and they replace them with a bus load of their own people," Nateq Nuri said.

"The continuation of this situation results in stagnation and a waste of human resources... We should not put people aside as we do not like their tastes," he said.