A self-proclaimed religious fundamentalist, Ahmadinejad vowed he would "build up an exemplary, developed and powerful Islamic society" following his trouncing of moderate cleric Akbar Hashemi Rafsanjani.

"Today, all competition should turn into friendship. We are part of a big family that should go hand in hand to build our proud Iran," the 49-year-old told state media, calling for national reconciliation after what has been a bitter election race marred by allegations of rigging.

Final results gave Ahmadinejad 61.69 percent against Rafsanjani's 35.92 percent. Turnout of the 46.8 million eligible voters was reported at 59.72 percent, slightly lower than last week's first round of the vote.

Ahmadinejad's win gives anti-Western ultra-conservatives complete control of every elected and unelected institution in Iran and effectively slams the door on any chance of reconciliation with the United States.

The hardliners have been urging a more confrontational stance in an already tense nuclear stand-off with the international community, arguing that Iran has a "legitimate right" to press on with nuclear work and, more importantly, should do so regardless of the consequences.

French Foreign Minister Philippe Douste-Blazy said he hoped "the newly elected Iranian authorities will continue the work that we European diplomats began with the aim of suspending nuclear activities".

British Foreign Secretary Jack Straw also demanded from Iran "early steps to address international concerns about its nuclear programme".

Iran maintains it only wants to generate atomic energy.

But Rafsanjani, who had promised to press on with detente and reforms, was seen as a more liberal negotiating partner in the EU-Iran nuclear talks. His embarrassing defeat could end his long political career and remove a moderating influence within the 26-year-old theocracy.

The United States was quick to scorn Iran's ruling clergy, with the White House expressing support for "those who call for greater freedom for the Iranian people."

Ahmadinejad will become the first non-cleric to hold Iran's presidency since 1981, a fact of little meaning to those who fear he will take away social liberties that have been gained in the past eight years.

He has insisted that freedom in Iran "is already beyond what could be imagined".

Iran's religious right has been angered over the "Westoxication" seen under outgoing President Mohammad Khatami, such as an easing of the strict Islamic dress code, unmarried couples flirting in the streets, increased foreign involvement in the economy and a less radical approach to international affairs.

The election was seen as the most critical since the 1979 Islamic revolution, and a spat over alleged fraud exposed deep divisions at the top of the regime.

Rafsanjani and two reformist candidates beaten in last week's first round have accused well-financed hardline regime elements such as the Guardians Council, the Basij militia and Revolutionary Guards of rigging the polls.

But the Guardians Council, an unelected hardline-controlled political watchdog, dismissed renewed complaints on Friday and vetoed any move to halt the polls -- in much the same way it had blocked Khatami's reform agenda.

Amid apparent fears over the reaction to the result, supreme leader Ali Khamenei issued a decree banning the supporters of either candidate from taking to the streets later in the morning.

"You illustrated the secret of your solidity and power against the expansionist policies of the arrogance of the world," Khamenei said in a message to the Iranian people read out on state television.

Ahmadinejad, a veteran of the elite Revolutionary Guards, gained momentum thanks to his austere image as a God-fearing public servant who made a direct appeal to Iranians suffering from unemployment, inflation and corruption.

He promised the Middle East's most populous nation that oil wealth would be more fairly distributed. On Saturday he again desribed himself as a humble "street sweeper", and pledged to clean up the oil sector.

Rafsanjani, by contrast, is widely seen as being fantastically rich, and has struggled to win support from many voters disenchanted with Iran's political elite.

Many critics of the regime, such as Nobel Peace Prize winner Shirin Ebadi, dismissed the election process as fundamentally flawed and chose to boycott.

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