Iran's authorities have given the go-ahead to the construction of the Middle East's biggest textile factory, according to English-language newspaper Iran Daily.

The plant, which would be built in the northwestern city of Ardebil and would cover 15,000 hectares, would be one of the largest textile factories in the world.

Authorities have confirmed that the private sector companies involved will be provided with $100 million from the Foreign Exchange Reserve Fund for the project.

The factory, if completed, could create 3,000 direct jobs.

Many experts have warned that textile manufacturing has an uncertain future in Iran, where production costs are 30 per cent above the international average.