Iranian authorities will lift a long-standing house arrest order imposed on an elderly Muslim cleric who has been the most prominent critic of the country's conservative Islamic leadership, the official Islamic Republic News Agency reported today.

The cleric, Ayatollah Hossein Ali Montazeri, who was once in line to succeed Ayatollah Ruhollah Khomeini as supreme leader, has been confined to his home in the holy city of Qom since 1997, when he sharpened his criticism of Ayatollah Ali Khamenei, the more junior cleric who became supreme leader.

Montazeri, 81, is in failing health. The announcement of his release came after appeals by the European Union and a petition signed by more than 100 members of the Iranian parliament, a body controlled by reformers who analysts said might consider Montazeri's release a victory.

"It is very significant, very significant," said Shirzad Bozorgnehr, editor of the Iran News. "It could be seen as a positive step, or a score for reformists. But overall in my personal opinion, nothing much is going to change, because he probably is not going to be allowed to hold news conferences or write books. It's going to be a while before we know what restrictions remain."

Montazeri's son, Ahmad, told the Reuters news agency that his father made no deal to win his release. Montazeri's stature arises from his religious rank and his boldness in standing up to the hard-liners, who were criticized by Montazeri in the 1980s for executing and imprisoning opponents.

The unelected hard-line conservatives continue to control the security and military organs in Iran, despite widespread popular support for the reformers elected to parliament and the presidency. The struggle for control of the nation of 65 million is played out in incremental steps such as the confinement and release of Montazeri.

One of perhaps a half-dozen Iranian clerics to achieve the rank of grand ayatollah, Montazeri was Khomeini's representative inside Iran when Khomeini lived in exile in France before returning during the 1979 revolution that established religious rule. Even in a 1989 letter severing ties with Montazeri on the grounds that his "ungrateful" one-time favorite would "hand over this country to the liberals," Khomeini called him "the fruit of my life's labors."

"He has a tremendous following in Iran," said Gary G. Sick, an expert on Iran at Columbia University. "His credentials as being part of the revolution are unassailable. He is still looked up to by many conservative clerics as their primary source of emulation."

Khamenei ordered Montazeri confined to his home in Qom, a religious city, four years ago, after Montazeri offered religious justification for the elections that swept reformers into Iran's parliament and presidency. His teachings, banned in Iran's seminaries, continued to be posted on his Web site, www.montazeri.com, and the cleric conducted interviews by fax and even over an intercom to an adjoining compound.

"From the Koran, the book of God, one can deduce that government is a public affair," Montazeri told the Guardian, a British newspaper, in a faxed interview in 2000.

His house arrest has been a rallying point for reformers across Iran's political spectrum. It was cited by Ayatollah Jalaleddin Taheri in his resignation as prayer leader in Isfahan in July. The prospect that the house arrest would be lifted was hinted at last week by a conservative newspaper, following numerous public petitions citing Montazeri's failing health.

Montazeri's son recently warned that authorities would be held responsible if the cleric died under house arrest.

Ayatollah Hossein Ali Montazeri has been confined to his home in the holy city of Qom since 1997.