He was rarely out of the headlines, dismissing the chief demand of the West in the atomic standoff, firing ministers and lambasting rivals with a tone rarely heard in Iranian politics.

Domestic critics accused Ahmadinejad of underestimating the consequences of a potential third set of UN sanctions against Iran and provoking double-digit inflation with populist economic policies.

Western countries warned that only a full suspension of uranium enrichment -- a potential bomb-making process -- could end the nuclear standoff and the threat of sanctions.

But Iran ploughed on with its nuclear programme, completing the installation of more than 3,000 centrifuges at an enrichment plant in Natanz, proclaiming that the drive had reached an "industrial phase".

Ahmadinejad compared the nuclear programme to a "train without brakes" and said his skills as an engineer told him the United States would not launch a military attack.

In December, he claimed a "great victory" after a US intelligence report said Iran had halted a nuclear weapons drive in 2003, taking the heat out of the crisis and reducing the probability of military action.

Ahmadinejad always emphasised his stance had the backing of supreme leader Ayatollah Ali Khamenei, who on occasion also reminded Iranians of the importance of standing up to the West in the nuclear crisis.

The relative moderate Ali Larijani, who led Iran's nuclear talks with Europe over the past two years, resigned amid talk he was unhappy with Ahmadinejad's confrontational stance.

In a sign the tough nuclear policy was here to stay, Ahmadinejad replaced Larijani with his ally Saeed Jalili, an intransigent hardliner who wrote a book entitled the "Foreign Policy of the Prophet."

Amid the simmering nuclear tensions, the most serious diplomatic crisis of the year was the arrest by Iran in March of 15 British sailors and marines on charges of entering its territorial waters.

Iran paraded the captives on television and sought to extract every advantage it could. Then, in typically theatrical style, Ahmadinejad suddenly announced at a news conference they were to be released.

The farcical scenes that followed -- a smiling president shaking hands with the puzzled sailors dressed in ill-fitting suits given them by Iran -- were among the most indelible images of the year.

Ahmadinejad continued to predict the imminent demise of Israel, saying a "countdown" had begun to the Jewish state's disappearance while also expressing bewilderment over the Western outrage at his comments.

Never adverse to publicity abroad, Ahmadinejad walked into a lion's den by giving a speech at Columbia University in New York where the university president introduced him as a "petty and cruel dictator".

Amid a barrage of questions and heckling, he then caused another firestorm by telling the bewildered American students that "in Iran we don't have homosexuals like in your country."

Western rights groups condemned Iran for a year that saw the first stoning sentence carried out in five years, a number of hangings unprecedented in recent years and increased pressure on student activists.

Executions -- often in public -- mounted as the authorities implemented a campaign against "arazel va obash," a Persian term that translates as "thugs" and describes rapists, drug smugglers and those deemed a social menace.

Ahmadinejad also courted controversy in domestic policy as political tensions mounted ahead of parliamentary elections on March 14.

He fired his ministers of education, oil and industry, replaced a swathe of officials and merged a key planning body into the government, prompting critics to allege that policy-making was being reduced to a small coterie of allies.

"One cannot lead the country with just three or 10 people," sniped moderate cleric Hassan Rowhani, a close ally of the pragmatic former president Akbar Hashemi Rafsanjani, Ahmadinejad's arch political rival.

The president described his critics as "traitors" and having "less intelligence than a goat".

Another Rafsanjani ally, former nuclear official Hossein Moussavian, was arrested for spying, released on bail and then publicly accused by Ahmadinejad of being a criminal.

The judiciary said he had no case to answer, prompting another angry outburst from the president.

But for many Iranians -- who themselves will mark their New Year of 1387 on March 21 -- the most pressing question was a startling jump in inflation.

The price of basic goods like fruit, vegetables and chicken rocketed over the past six months, hitting the poor hardest. Inflation reached 19.1 percent year-on-year in November.

Ahmadinejad came to power on a platform of promoting social "justice," and economists accused him of stoking inflation by injecting massive quantities of cash into the economy to fund local infrastructure projects.

The problem forced Ahamadinejad into giving a televised interview largely devoted to inflation in December, where he characteristically blamed his critics and external factors -- and not the government's performance.

The interview intensified rather than diminished the criticism, with conservatives like Tehran mayor Mohammad Baqer Qalibaf and former Revolutionary Guards chief Mohsen Rezaie joining attacks on the government.

"Take this issue (inflation) very seriously... It should be dealt with using economic expertise and not with slogans and political games," commented Rafsanjani.

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