WASHINGTON — The former director of President Bush’s flagship democracy program for the Middle East is saying that the State Department has “effectively killed” a program to disburse millions of dollars to Iran’s liberal opposition.

In an interview yesterday, Scott Carpenter said a recent decision to move the $75 million annual aid program for Iranian democrats to the State Department’s Office of Iranian Affairs would effectively neuter an initiative the president had intended to spur democracy inside the Islamic Republic.

“In my view, this pretty much kills the Iran democracy program,” Mr. Carpenter said of the decision by the State Department to subsume the program. “There is not the expertise, there is not the energy for it. The Iran office is worried about the bilateral policy. I think they are not committed to this anymore.”

Mr. Carpenter, who headed the Middle East Partnership Initiative and was a Deputy Assistant Secretary of State for Near Eastern Affairs until he left the Bush administration this summer, predicted the $20 million devoted to supporting the activities inside the Islamic Republic would be relegated to what he called “safe initiatives” such as student exchange programs, and not the more daring projects he and his deputy, David Denehy, funded, such as training for Web site operators to evade Internet censorship, political polling, and training on increasing recruitment for civil society groups.

The decision of the State Department to move the democracy promotion project to the office that handles American sanctions and negotiations with the mullahs comes as American diplomats are exploring more meetings in Baghdad with Iranian envoys. This week, American commanders in the field announced that some of the Iranian Quds operatives detained in January from their base in Irbil would be sent back to Iran and noted that in recent weeks Iran had sent fewer copper disc land mines known as explosively formed penetrators to insurgents than in prior months. Last month, Iranian officials promised their Iraqi counterparts to end support for terrorism in Iraq. Later this month Iran’s foreign ministry will open a new consulate in northern Iraq.

The State Department yesterday did not comment on the record. However a State Department official yesterday did confirm that the democracy office would be moving to the Office of Iranian Affairs. “We believe that policy and programs for Iran need to be together and run absolutely consistently in support of each other,” this official, who asked for anonymity said. “Iran is one of the few countries in the world where we do not have an embassy, which would be the normal locus for much of this program management. So in this unique situation, this function, supporting Iranian democracy, is best managed and promoted from the Office of Iranian Affairs.”

This official also singled out Mr. Denehy, the official in charge of the Iran programs who left his post last month, for praise. “David Denehy did an excellent job in establishing this program, in insuring these funds were made available and being put to good use,” the official said.

In the interview yesterday, Mr. Carpenter said that the money for programs in Iran, which began being spent in the 2004 fiscal year, was always a major source of contention within the State Department.

“From the beginning there was a concern among the foreign service that was magnified when David Satterfield when took over as principle deputy assistant secretary, that the Iran democracy program was not being coordinated well enough with the rest of Iran policy. They thought it was too provocative and too forward leaning,” Mr. Carpenter said. “It would complicate the relationship, even the prospect of a relationship, with Iran.”

Despite the president’s rhetoric at times supporting the Iranian people’s desire for to freedom, the Bush administration was slow in creating an office to aid Iranian democrats. The first money available for the democracy projects, $1.5 million, materialized in the 2004 fiscal year after Senator Brownback, a Republican from Kansas, pressed the White House to include the funding in the budget. The money for Iranian democrats increased significantly in 2006 to $75 million after Iran announced that it had begun to enrich uranium at its Natanz facility. But most of that money, $49 million, was designated for Voice of America’s Persian service and Radio Farda, an American funded Persian radio station that mixes news and popular music.

“If the program is just going to be expanding Voice of America and Radio Farda,” Mr. Carpenter said, “don’t brand it as the Iran democracy program.”

In the last year, the pro-democracy funding came under criticism from some Iranian liberal activists, most notably Akbar Ganji, who in 2005 captured the world’s attention with his letters from prison demanding Iran’s supreme leader stand for election. Last month, Mr. Ganji published an op-ed in the Washington Post urging Congress to pass a resolution promising to end all funding for Iran’s democratic opposition. Under President Ahmadinejad, Iranians suspected of receiving American money have been arrested and accused of espionage. The State Department does not publish the names of all the recipients of the Iran democracy aid to protect against such persecution.

Mr. Carpenter said he was aware of the risks attached to American government funding for Iranian liberals. He also said he was open to finding non-government alternatives to support projects in Iran. But he also said that Mr. Ganji did not speak for all of his countrymen in this regard.

“No one is forcing anyone in Iran or outside Iran to take this money to support democracy in Iran,” Mr. Carpenter said. “As long as there are people who do want that support, the United States has a moral obligation to provide it.”

The White House requested $75 million for the 2008 fiscal year to support democracy in Iran. The House bill only funds the program for $50 million. With the prospect of Congress approving a foreign aid budget slim, funding for the Iranian democracy programs is likely to be much less next year.