The popularity of Iran's controversial leader, Mahmoud Ahmadinejad, is surging almost a year after he unexpectedly won a closely contested presidential election, Iranian officials and western diplomats said yesterday.

Attributing his success to his populist style and fortnightly meet-the-people tours of the country, the sources said that as matters stood, Mr Ahmadinejad was the clear favourite to win a second term in 2009. The perception that the president was standing up to the US on the nuclear issue was also boosting his standing.

"He's more popular now than a year ago. He's on the rise," said Nasser Hadian-Jazy, a professor of political science at Tehran University. "I guess he has a 70% approval rating right now. He portrays himself as a simple man doing an honest job. He's comfortable communicating with ordinary people."

While there are no reliable national opinion polls in Iran, western diplomats acknowledged that support for Mr Ahmadinejad is growing, defying predictions after last June's election that he would not last more than three months.

"An indication of his power is the way he has whipped up public opinion on the nuclear energy issue," a western diplomat said. "If there was an election today, he would win." It was possible that Mr Ahmadinejad could become a liability to the government if Iran were taken to the UN security council, he said, adding: "But I think in that situation, he gets stronger."

Vahid Karimi of the government-affiliated Institute for Political and International Studies said: "Certainly his popularity is increasing. People like what he says. It's not so much because he stands up to the west but because he's not corrupt. This is very important."

Independent Iranian sources said many people were surprised that Mr Ahmadinejad had not turned out to be as socially conservative as many expected. His attacks on the privileges enjoyed by some of Iran's ruling clerical elite and his recent unsuccessful attempt to allow women to attend football matches had made a big impact.

Mr Ahmadinejad's rising fortunes run counter to US attempts to isolate Iran, which it brands a rogue state. US officials have described the Iranian president as a threat to world peace and claim that he faces a popular insurrection at home.

Professor Hadian-Jazy said Mr Ahmadinejad had been surprised by reaction to his criticism of Israel and apparent denial of the Holocaust. "Coming from his background it was not uncommon to say that stuff. He never thought that as president it would be different. But once he got the reaction, he realised it could establish him as a strong leader among Muslims. It was a calculated move."

Iran strongly supports Palestinian rights, but the president's anti-Israeli statements made an even bigger impact in the Arab world, said Sayed Mohammad Adeli, Iran's former ambassador to Britain and the head of the Econotrend thinktank. "They see Ahmadinejad's resistance as admirable. He has become a hero of the people on the street."

Mohammad Atrianfar, the founder of the leading reformist newspaper Shargh and an ally of Hashemi Rafsanjani, the president's rival, said Mr Ahmadinejad would not have it all his own way. "The reform movement is alive, despite last year's defeat," he said.

Meanwhile, the government was mishandling economic policy, and that could be its undoing. "The present economy, due to the rate of oil prices, is in a good situation. But the management of the state sector is very bad. He has taken horrid and rushed decisions."

Mr Atrianfar said that oil revenue was being squandered through state handouts to impoverished provinces and commodity subsidies. But there was insufficient investment in long-term projects and infrastructure, foreign investment was falling, and the country was suffering capital flight and a brain drain.