The Iranian automobile workers’ leader has protested against a two billion euro deal to buy electric buses from China for Tehran.

The reaction by the head of the Iranian Automobile Workers Union (IAWU) on Thursday came after the capital’s authority agreed the contract with a Chinese firm.

Mojtaba Hajizadeh branded the move an "insult to domestic production" and explained that it was unjustifiable financially because "domestic vehicles and their spare parts are much cheaper than imported models."

He told state broadcaster ILNA that they could not compete with China because of the leverage Beijing enjoys, particularly including its "veto power" in the political arena.

The news of the vast contract with China for buses, other transport and traffic surveillance equipment has been met with a massive backlash even from officials in the past few days.

Tehran city councilors and the media have called for greater transparency, but details of the contract remain undisclosed.

Jafar Tashakori Hashemi, a member of the Tehran City Council, said on Monday: "This is a violation of the municipality's work. As far as I know, bus purchases are not a matter of national security, so we should be able to view the actual contract."

The contract signed by Mayor Alireza Zakani is expected to be funded by proceeds from Iranian oil exports to China, and funds that have accumulated in China while US sanctions have been in effect.

Zakani confirmed that he had signed several agreements during his January visit to China.