Mohammad Aliabadi will wave the white flag to Fifa [GALLO/GETTY]

Fifa, world football's governing body, and the IFF have been at loggerheads for months over Iran's refusal to bar members of the state-run Physical Education Organisation (PEO), headed by Aliabadi, from running in its presidential election.

The vote was initially scheduled for December 6 but was postponed after Fifa said it would not recognise the result.

President Mahmoud Ahmadinejad, in an attempt to settle the dispute with Fifa, said he had called on his deputy to quit the race for president of the IFF, the daily Etemad-e Melli reported.

"I told Aliabadi to end his nomination and allow the federation's (IFF) elections to be held," Ahmadinejad told state television.

Aliabadi officially announced his decision to withdraw on Monday, Etemad-e Melli added.

"The current situation is the result of Aliabadi's mistake," Ahmadinejad said.

He did not give further details.

A number of officials and high-profile coaches have been removed since Ahmadinejad, himself a football fan in a country passionate about the game, took office in 2005.

The Asian Football Confederation (AFC) said last week that following a high-level meeting with an Iranian sports delegation in Kuala Lumpur, nothing had been resolved yet.

Fifa and the AFC previously agreed to allow officials from PEO to become members of the IFF's general assembly but refused to let a politician take the top post as this would amount to government interference in Iranian football and would be against international regulations.

The Iranian national side is without a coach and one is unlikely to be appointed before the new IFF chief is elected.