TEHRAN, July 11 (IslamOnline & News Agencies) - Street protests and anti-clerical attacks Thursday, following the shock resignation of a prominent scholar, plunged the Iranian regime into its deepest political crisis since the 1979 Islamic revolution.

Ayatollah Jalaledine Taheri, Imam (Prayer leader) of Iran's central city of Isfahan, resigned Wednesday over the "chaotic situation" in the country and what he said was "generalized corruption at all levels" of religious power in Iran, reported Agence France-Presse (AFP).

He also expressed his firm support for dissident cleric Hossein Ali Montazeri, the disgraced one-time successor of Ayatollah Ruhollah Khomeini, the late founder of the Islamic Republic.

Taheri, who is close to reformist President Mohammad Khatami, has impeccable revolutionary credentials.

He was an associate of Khomeini and played a major role in mobilizing the people of Isfahan in favor of an Islamic revolution against the Shah and the resulting state.

His resignation came with a fiery attack against the dominant conservatives who accept no authority but Khamenei's and, through control of the judiciary and other key bodies, constantly hamper the Khatami government's attempts at reforms.

He listed "deception, unemployment, inflation, the diabolical gap between the rich and poor, bribery, cheating, growing drug consumption, the incompetence of authorities and the failure of the political structure" of the regime as reasons for stepping down.

His letter raised an outcry among conservatives, who accused Taheri of having written it "under the influence of suspicious elements" in order to distract attention from the "Aghajari affair."

Late Wednesday, however, 125 of the 290 members of the reform-majority parliament voiced their support for Taheri, while expressing regret at his resignation.

"The war has begun and it will not spare anyone, not even the clergy," political analyst Dariush Abdali said Thursday. He added that a "breach" opened between the regime's main conservative and reformist factions, reported AFP.

A series of incidents in recent weeks increased the dissension among conservatives and reformers, and is for the first time pulling the nation's powerful Shiite clergy from the holy city of Qom into the fray.

Reports on gatherings Tuesday in Tehran and other cities by thousands of people, families as well as militant young people, who defied a government ban to mark the anniversary of student unrest in July 1999 continued to fill newspapers Thursday.

The demonstrations took an anti-government turn, and ended in clashes with the police and the arrest of more than 200 people.

However, there were no reports Thursday morning concerning the resignation of Taheri.

The nation's Supreme National Security Council (SNSC) late Wednesday barred the press from reporting "in favor of or against" Taheri.

The council, under the direct authority of supreme leader Ayatollah Ali Khamenei, is usually chaired by the head of state, moderate Khatami.

But its secretarial board which issued the ban is headed by conservative Hassan Rowhani.

Reformist writer and journalist Hashem Aghajari, a member of the radical Khatami-allied Organization of the Mujahedeen of the Islamic Revolution (OMIR), also sparked a storm last month with an anti-clerical speech in the western town of Hamedan.

He was charged with offending the clergy and barred from leaving the country after saying Muslims "should not blindly" follow religious leaders and calling for a "religious reformation" of Shiism.

He was even compared to British writer Salman Rushdie, condemned to death in February 1989 by an Iranian religious decree for publishing the "blasphemous" novel "The Satanic Verses".

The OMIR hit back Thursday with a fierce attack on the circle of conservative clerics in their bastion of Qom, whose Association of Studies runs Iran's Koranic schools.

Accusing the association of being "at the service of the conservatives and their mercantile capitalism," OMIR secretary Mohammad Salamati called it a "political rival and not an acceptable religious body."

The association earlier alleged that the OMIR "has nothing Islamic" to it.