Azerbaijan's President Ilham Aliyev has appointed his wife as first vice president, the latest move seen as tightening the family's grip on the oil-rich Caspian nation.

Tuesday’s appointment of Mehriban Aliyeva follows constitutional changes made after a tightly managed referendum last year which introduced the powerful position of first vice president, the second most senior official in the country.

Aliyeva, 52, has been an MP for the ruling Yeni Azerbaijan party since 2005 and head of the influential Heydar Aliyev Foundation - named after her father-in-law and former president.

Born into the powerful Pashayev family, Aliyeva has sometimes been seen as a possible successor to her husband, who took over in 2003 after the death of his father Heydar, a former KGB officer and Communist-era boss.

'Cementing dynastic rule'

Azerbaijan's embattled opposition angrily criticised Aliyeva's elevation as undemocratic and called it a ploy to cement the Aliyev family's dynastic rule.

"The move throws Azerbaijan back to medieval, feudal times," opposition leader Isa Gambar of the Musavat party told the AFP news agency .

"Family rule has no place in the 21st century," he added.

The president, 55, cruised to a third five-year term against limited opposition in 2013, extending his family's rule into a third decade.

Supporters have praised the Aliyevs for turning a republic once considered a Soviet backwater into a flourishing energy supplier to Europe.

But critics argue they have crushed all opposition and used their power to amass a fortune for the president and his family.

Activists have raised concerns over Azerbaijan's poor rights record, with Human Rights Watch in May blasting the country for a ruthless crackdown that has seen political activists and critical journalists jailed.

Lavish lifestyle

Known for her love of luxury, Aliyeva featured prominently in US diplomatic cables published by Wikileaks, one of which dubbed her "a first lady, too, in fashion".

"First Lady Mehriban Aliyeva appears to have had substantial cosmetic surgery, presumably overseas, and wears dresses that would be considered provocative even in the Western world," the leaked 2010 cable said.

An eye doctor by training, she has also authored a dissertation on the ethical aspects of mercy killing.

In 2004, she was appointed a goodwill ambassador for the United Nations culture agency, UNESCO.