"This is to support democracy. It will be used to improve radio broadcasts, begin satellite broadcasts and include money for scholarships for Iranian students to come to the United States," the official, who asked not to be named because the announcement was not yet official, said on Wednesday.

 

In April the US said it had set aside $3 million to promote democracy in Iran, saying the initiative does not violate the Algeria non-interference agreement.

 

At the time, Richard Boucher, the US State Department spokesman, said non-governmental educational and other groups inside Iran, which are willing to work towards achieving democracy in Iran, are eligible to compete for the money.

 

Muhammad Javad Zarif, Iran's ambassador to the UN, called the plan a clear violation of a US-Iranian agreement which was signed in Algeria in 1981 following the release of 52 US embassy employees held hostage in Tehran for 444 days.

 

Influencing Iranians

 

Political analysts and Western diplomats are sceptical of how effective US programmes to promote democracy in Iran can be but note Washington has few other policy options when it is seeking to influence Iranians.

 

At a a congressional hearing on Wednesday, Condoleezza Rice, the US secretary of state, will ask for the money in a supplemental budget request for fiscal year 2006, the official said.

 

The 2006 budget already has $10 million for such programmes.

 

The US, which cut diplomatic ties with Iran after the 1979 revolution, is locked in a standoff with the Islamic republic to curb what it suspects are programmes to build a nuclear bomb.

 

But the Bush administration has emphasised in recent weeks that it is not at odds with the people of Iran and said it wants to help them win freedoms from their government.

 

The US president has made spreading democracy, especially in Muslim countries, a centrepiece of his foreign policy.