(Reuters) - In late January, a former deputy of conservative ex-president Mahmoud Ahmadinejad who has been jailed for embezzlement raised explosive allegations which have now spurred speculation Ahmadinejad himself could face charges.

They were made in a private letter that was published by the Iranian Labour News Agency, giving a rare insight into splits at the top at a time when the former president, a fierce critic of the West, was showing signs of preparing a political comeback.

Ahmadinejad has denied the allegations, which linked him to the case, and his supporters say they are politically motivated.

Senior officials have since expressed concern public splits within Iran's factionalized elite might undermine negotiations with major world powers on its disputed nuclear program.

In a speech in late March for example, Iran's Supreme Leader Ayatollah Ali Khamenei urged any critics of the government leading the negotiations, led by Ahmadinejad's successor, centrist Hassan Rouhani, not to use insults.

Against this background, pursuing the allegations against Ahmadinejad would be sensitive; some analysts say too sensitive. Others say statements by some MPs, officials and media close to the authorities suggest the judiciary is inching towards a case.

Ahmadinejad's former vice president Mohammed Reza Rahimi became the most senior official to be convicted of graft since the 1979 Islamic Revolution when he was sentenced to five years in jail and fined 38.5 billion rials (about $1.3 million).

State media said he had taken bribes in connection with corruption at the state�Iran Insurance Company.

Rahimi wrote to Ahmadinejad complaining he should have supported him over the case and alleging that he, Rahimi, had helped the government pay 12 billion rials ($400,000) in bribes to about 170 conservative parliamentary candidates in 2008.

"Were you not informed that this is what the whole story was about?" Rahimi wrote.

He did not spell out what the candidates were supposed to have done for the alleged payments, but implied the MPs would be expected to cooperate with Ahmadinejad's government. Rahimi became vice president from 2009-1013.

Before the letter was published, Ahmadinejad had denied in a statement that the corruption charges against Rahimi were linked to his government, noting they related to a time before Rahimi became his deputy.

Days afterwards, he launched a new website in a hint that he could mount a comeback in parliamentary elections next year.

CAMPAIGN

Last year, a billionaire tycoon with alleged links to aides to Ahmadinejad was hanged for involvement in a $2.7 billion fraud and money-laundering affair involving 14 state-owned and private banks. All four defendants denied wrongdoing.

It came to light as Iranians were being hard hit by the sanctions and severely damaged the reputation of Ahmadinejad and his entourage at the end of his second term.

Ahmadinejad's supporters accused his political enemies of using that case to ensure the outgoing president's allies had no chance in the 2013 presidential election.

That vote was won by Rouhani by a landslide on pledges to relieve the international isolation and repair economic damage from sanctions over the disputed nuclear program as well as what Rouhani said was financial mismanagement under Ahmadinejad.

Rahimi�s letter prompted a group of MPs to write to the heads of the judiciary and parliament urging them to reveal which candidates were alleged to have received bribes.

�This was not clean money. We have to get this money back by any means possible and put it at the disposal of the people,� Kamaluddin Pirmoazen, one of the letter's authors, told Reuters.

A fiery orator who denied the Holocaust and often condemned the West, Ahmadinejad also clashed with parliament, where he was accused of mismanaging the�economy�and snubbing Khamenei.

Ahmad Tavakoli, a conservative MP long critical of Ahmadinejad, said charges should be brought against him.

�Any person who breaks the law must be tried. And in my view Ahmadinejad has been a law-breaker,� Tavakoli said in early February, according to the Islamic Republic News Agency (IRNA).

A Facebook and Instagram campaign were started shortly after the letter was published called �Demand for Trial of Mahmoud Ahmadinejad". The creators of the Facebook page declined an interview request.

A spokesman for Iran's Guardian Council, a powerful body which can vet parliamentary candidates and has legislative and judicial authority, said it could step in to investigate the allegations in Rahimi�s letter if the parliament began investigating the matter or if the judiciary opened a new file.

Asked about the wider implications of Rahimi's sentencing, judiciary spokesman Gholamhossein Mohseni-Ejei told a news conference: �The judiciary has had and continues to have the serious intent to confront all people who are economically corrupt at whatever level or whatever position they are in.�

"NOW IS NOT THE TIME"

Attempts to reach former senior Ahmadinejad advisers by phone for further comment were unsuccessful.

Ahmadinejad already faces a handful of charges from his time in office which, according to local media, are mostly linked to government procedures that were not followed properly. He was summoned to court in late 2013 but did not show up.

Asked about Ahmadinejad�s legal file, judiciary spokesman Mohseni-Ejei said this month: �At the moment this matter is being followed up and the duration will depend on the prosecutor.�

Some doubt Ahmadinejad will be prosecuted regardless of the validity of the charges as this could tarnish Khamenei, whose support was key to Ahmadinejad's grip on power, especially after his 2009 re-election when popular unrest over alleged vote fraud were crushed by security forces.

�If they act against Ahmadinejad not only are there more documents he might reveal, as he�s often threatened to do, but eventually people will start to ask, 'Who was behind him?'� said Abbas Milani, director of the Iranian Studies program at Stanford University.

�And we all know the answer to that question - it's Ayatollah Khamenei and the IRGC�s top command," he said, referring to Iran's most powerful military force, the Revolutionary Guards. "I think it (prosecution of Ahmadinejad) is a political liability they just can�t afford at this time.�

Ahmadinejad was asked by local media in February about the corruption allegations. The Iranian Students' News Agency quoted him as saying: �There are answers but now is not the time.�

By Reuters