The son of Iran's supreme leader, Ayatollah Ali Khamenei, has taken control of the militia being used to crush the protest movement, according to a senior Iranian source.

The source, a politician with strong connections to the security apparatus, said that the leading role being played by Mojtaba Khamenei had dismayed many of the country's senior clerics, conservative politicians and Revolutionary Guard generals.

But these conservatives are reluctant to challenge the Khameneis openly out of fear that any conflict would destabilise the Islamic Republic and weaken Iran in the region. Instead they will use their positions in the organs of state to make it hard for the supreme leader and President Mahmoud Ahmadinejad to govern.

"This game has not finished. The game has only just started," the source said, on condition of anonymity because of the sensitivity of his own position in Iran.

He said Mojtaba had played a leading role in orchestrating Ahmadinejad's disputed election victory on 12 June and had led the backlash against protests through direct control of street militias, known as basiji.

The official death toll from that backlash is less than 20 but, according to a Tehran doctor who has given his account to the Guardian, the actual number is much higher – 38 in the first week at his hospital alone. He said the basiji covered up the deaths and pressured doctors not to talk.

"Mojtaba is the commander of this coup d'etat. The basiji are operating on Mojtaba's orders, but his name is always hidden in all of this. The government never mentions him," the Iranian politician said. "Everyone is angry about this. The maraji [Iran's most senior ayatollahs] and the clerics are angry, the conservatives are very angry and strongly critical of Mojtaba. This situation cannot continue with so many people on the top against it."

Very little is known about Mojtaba Khamenei. He is the supreme leader's second son, reportedly being groomed to succeed his father. Such a dynastic succession would be very hard under present circumstances as the leader is supposed to be chosen by a clerical assembly of experts on the basis of the candidate's religious standing. Mojtaba wears clerical robes but by no means has the theological status to rise to the top job. A major upheaval in the clerical establishment would be required to arrange it.

Within Iran, Mojtaba is widely believed to control huge financial assets. There are claims on Iranian dissident websites that the current anti-British campaign in Tehran is motivated in part by Britain's announcement on 18 June that it had frozen nearly £1bn in Iranian assets, in accordance with UN and EU sanctions. The frozen funds included a lot of Mojtaba's money, it is claimed.

Mojtaba's name does not appear on the Treasury's list of targets of those sanctions, but one British official said the supreme leader's son may operate through state-run enterprises that are listed. "I'd be amazed if some of the money wasn't his," the official said.

The Iranian politician who spoke to the Guardian said the supreme leader had long been leaking support among the religious hierarchy on which his powerbase was once built and had now virtually lost it altogether. Among the roughly 20 maraji ("sources of emulation", from whose ranks the supreme leader is supposed to be chosen), he said Khamenei could only rely on the support of a handful.

He said that an axis of lay conservatives in important positions would also try to hinder Ahmadinejad's efforts to wield power. That axis includes Ali Larijani, the parliamentary speaker, Mohammad Baqer Qalibaf, the Tehran mayor, and Mohsen Rezai, one of the defeated presidential candidates and the secretary of the expediency council, which mediates disputes between the clerical and lay state institutions. They would be supported by the opposition's most powerful backer behind the scenes, former president Hashemi Rafsanjani, head of the expediency council and the assembly of experts.

The Iranian source also claimed there were splits in another pillar of the Islamic Republic, the Revolutionary Guard. The overall commander, General Ali Jafari, and the Tehran province commander, General Ali Fazli, were opposed to Mojtaba's power grab.

He said the hardline statements issued in the Revolutionary Guard's name, threatening a "decisive confrontation" with protesters, were the work of the political and public relations departments, which are under the direct control of Ahmadinejad, and did not represent a united position. That is a controversial claim. Most analyses have presented the Revolutionary Guard as monolithic and entirely behind the regime.

For revolutionary stalwarts uneasy over the direction of the regime, open rebellion was unthinkable, the politician said. "For them, the red line is the stability of the country," he said. "They will continue softly."

He said this hidden internecine struggle would last a considerable period and the outcome was far from clear. The only certainty was that the Khameneis and Ahmadinejad had not yet won. "They control things on the surface," he said. "But Iranians are not sheep."