A minister and confident of Prime Minister Shahpour Bakhtiar said today the government can live with the "shadow cabinet" named by Ayatollah Ruhollah Khomeini as long as it does not try to physically take power.

"This is the government of Khomeini," said Javad Khaddam, Bakhtiar's housing minister. "But as long as it doesn't interfere in the running of the country, nothing will happen. If it does, then there will most probably be some consequences."

Khaddam declined to spell out the consequences but added later: "I am 100 percent sure the army will not allow the religious people to run the country. If there is a confrontation, there will be bloodshed and it will be on Khomeini's shoulders."

Khaddam said Bakhtiar, who was appointed in late December by the shah, would not object to abolishing the monarchy and setting up a republic, provided it is done legally through democratic processes. He said Bakhtiar would be willing to step down after presiding over elections for a constituent assembly to draft a new constitution and pave the way for a new government, be it an Islamic republic or a constitutional monarchy.

In an interview with Iranian television, Bakhtiar said as long as th Cabinet named by Khomeini is a "matter of words, it is possible," the Associated Press reported.

["But if it comes to action, it's a different thing," he added, according to the AP. "I will have no objection to the announcement of a temporary government provided this government plays the role of a shadow government or future government."]

"We hope this confrontation will be solved by negotiations," Khaddam said in an interview at his home in a wealthy section of north Tehran.

He said the main item for negotiations with the Khomeini camp would be for "Bazargan to keep in the shadows for three months while Bakhtiar prepares the ground for a constituent assembly. Then most probably Bakhtiar would resign. This could be a way out of trouble." Mehdi Bazargan was named prime minister today and assigned by Khomeini to form a government.

Trouble could come, Khaddam said, if that government tries to "interfere" with the Bakhtiar administration by, for example, attempting to take over ministries. But he said he did not believe this will happen.

"It's a poker game," Khaddam said. "Somebody's bluffing and somebody else is counterbluffing."

He would not say what the Bakhtiar government's bluff was. But many observers have said that despite the threat of army reactions the generals might not in fact be willing to risk a complete rift in the military by cracking down on Khomeini.

Khaddam, who at 40 is the youngest Cabinet minister under Bakhtiar, called Khomeini's vision of an Islamic republic "another dictatorship."

He added, "We've been saying all along we don't want to go from one dictatorship to another. I will fight it."