Tehran: Iranian President Mahmoud Ahmadinejad inaugurated a new policy to encourage population growth, dismissing Iran's decades of internationally acclaimed family planning as ungodly and a Western import.

The new government initiative will pay families for every new child and deposit money into the newborn's bank account until they reach 18, effectively rolling back years of efforts to boost the economy by reducing the country's once runaway population growth.

"Those who raise idea of family planning, they are thinking in the realm of the secular world," Ahmadinejad said during the inauguration ceremony on Tuesday.

The plan is part of Ahmadinejad's stated commitment to further increase Iran's population, which is already estimated at 75 million. He has previously said the country could support up to 150 million.

The programme would be especially attractive to the lower income segments of the population that formed the backbone of Ahmadinejad's support in the 2005 and 2009 elections.

Throughout his tenure, the president has promoted populist policies in Iran, where 10 million people are estimated to live under the poverty line.

It is unclear, however, where the funds would come from as the government is already having trouble paying for basic infrastructure projects.

Starting in the early 1970s, Iran waged a successful family planning campaign across the country, including banners in public health care centres reading "two children are enough".

It was reversed after the 1979 Islamic revolution only to be brought back 10 years later when the population ballooned and the economy faltered.