LONDON (Dow Jones)-As Iranians get ready to vote for their new president next week, western companies are pinning their hopes on Akbar Hashemi Rafsanjani returning to the country's top political post.

The ex-president's seen in the west and within Iran as a man with both political

and economic clout, industry sources say. Even though there are some concerns about Rafsanjani's ability to push through much-needed reforms or improve investment terms for oil companies, he's considered the best bet when it comes to getting things done in a country where domestic squabbling and bureaucracy have for years stunted development of the country's key energy sector.

"He has a better feel for commercial realities than anyone else running in this campaign," says a London-based investment banker, requesting anonymity. "He has the kind of experience you need in a country which has so many political factions. That is what matters when you are signing a deal worth a few billions dollars."

A key player in Iran's conservative establishment since the 1979 Islamic Revolution, Rafsanjani, a 71 year old cleric, has already served twice as Iran's president from 1989 to 1997. Today, he chairs Iran's powerful Expediency Council and if the polls are correct he looks set to be Iran's next president when the country votes June 17.

Iran's ambassador to the U.K. Seyed Mohammad Hossein Adeli, describes Rafsanjani as a "doer and a man keen to forge strong links with the foreign investment community." As Iran's ex-foreign minister for economic affairs, Adeli is himself no stranger when it comes to doing business with the international investment community. He believes Rafsanjani will be able to gain support from Iran's conservative-led parliament because he has backing from both Iran's conservative and reformist groups.

Winning support from Iran's hardline parliament won't be easy, though, as President Mohammad Khatami and his reformist government learnt to their cost during two terms in office. Parliament is also a major obstacle foreign firms face when trying to play a part in developing Iran's massive energy sector.

Khatami can't stand again because he's completed two consecutive terms but even if he could the country's lack of economic progress on his watch would rule him out of contention.

Iran has made no secret of its eagerness to strike energy deals with foreign partners but business in the Organization of Petroleum Exporting Countries' second largest producer has been slow, mired in domestic politics and lengthy negotiations.

In recent months, energy hungry countries such as China and India seem willing to take the plunge and plough billions of dollars into deals with Iran but western oil firms appear to be taking a back seat until the elections are over.

As all eight presidential candidates from each of Iran's three reformist, centrist and conservative political factions intensify their campaign ahead of next week, western companies say that apart from Rafsanjani, they know little of the other candidates or their plans to do business with the outside world.

The latest polls show hardliner and ex-police chief Mohammad Baqer Qalibaf is running behind Rafsanjani and in third place is Mostafa Moin, a reformist and former education minister.

"It is really a case of better the devil you know," says an executive from a European energy major.

Speaking on condition of anonymity he adds: "So little is known of the other candidates. What is important for us is how any new president presents himself to the west and particularly the U.S."

Under the U.S.- imposed Iran and Libya Sanctions Act of 1996, foreign firms with U.S. assets are already limited in participating in Iran's energy sector.

Western sources say Rafsanjani's apparent conciliatory approach towards the U.S. and its' European allies - with whom Tehran is involved in a political showdown over its nuclear plans - could indeed avert an international crisis.

Some even go as far as to say he could be the man to end years of hostility with the U.S.

Icy relations between Washington and Tehran seemed to have thawed a little in recent weeks after the U.S. lifted its block on Iran's application to join the World Trade Organization.

As part of his political campaign, Rafsanjani has said economics must go hand in hand with politics.

"From his statements and manifesto, Rafsanjani clearly plans to focus on attracting more foreign investment into Iran," says Manoucher Takin, senior energy consultant at the London-based Centre for Global Energy Studies.

He believes Rafsanjani appeals to foreigners as his approach to business is more transparent than the other candidates. "Rafsanjani clearly seems to favour a more capitalist free market," he adds.

Rafsanjani's eagerness to appeal to Iran's predominantly young population also means he will place much emphasis on easing concerns over the state of the country's economy by creating jobs and developing all business sectors, although oil will be a top priority, analysts say.

Iranian oil ministry officials say they are confident that Rafsanjani will throw his weight behind the development of Iran's billions of barrels of hydrocarbons, which is the backbone of the country's economy.

"There is no doubt that Rafsanjani realises we need to strengthen our position within OPEC," says Iran's governor to OPEC, Hossein Kazempour Ardebili.

Foreign funds are key to Iran boosting its current production capacity of just over 4 million barrels-a-day to a targeted 5 million b/d within the next few years.

Kazempour played down suggestions that Rafsanjani will dig his heels in when it comes to reforming Iran's oil industry.

He says if Rafsanjani comes to power, some areas related to energy investment will be reviewed, such as the security of supply and the length of time a foreign business can be involved in a project.

Others however, are less confident, especially after a recent report suggested Rafsanjani has no plans to alter Iran's controversial buyback system.

Introduced to skirt around Iran's constitution which prohibits foreigners from taking an equity stake in Iran's energy sector, buybacks give payment in kind to oil majors that develop its oil fields. The scheme has been bitterly criticized by many foreign companies, which would rather participate in production sharing agreements. "Unless this report is purely for the domestic audience, then this is a setback for Iran's oil industry," says Mehdi Varzi, an independent oil consultant and former head of energy at Dresdner Kleinwort Wasserstein.

He says it's imperative that any future Iranian government shakes up existing investment terms or the country will struggle to lift its oil production capacity beyond current levels.

Other sources say despite constant reassurances from Rafsanjani supporters, they are still concerned he may not have the ability to push through much needed reforms and improve relations with the west, initiatives which have until now been met with opposition by the country's hardliners.

This, they say, could be made worse if Rafsanjani doesn't win a majority in next week's polling and voting goes to a second round.

Already criticized by many Iranians for his reported massive personal wealth and business dealings, some analysts say that despite polls that point to a Rafsanjani win, next week's outcome isn't a forgone conclusion.

But Siamak Namazi, managing director at Tehran-based consultants Atieh Bahar says regardless of who is appointed president, Iran is bound to move towards increased economic liberalization, as the Supreme Leader, Ayatullah Ali Khamenei recently signed off a decree, whereby all branches of the Iranian government are obliged to adopt a more liberal approach to the economy.