UPDATE 1-Iran readies domestic Internet system, blocks Google
* Tehran says move is for cyber security
* Many Iranians see new crackdown on Internet freedom
* Google, Gmail blocked
DUBAI, Sept 23 (Reuters) - Iran plans to switch its citizens onto a domestic Internet network in what officials say is a bid to improve cyber security but which many Iranians fear is the latest way to control their access to the web.
The announcement, made by a government deputy minister on Sunday, came as state television announced Google Inc's search engine and its email service would be blocked "within a few hours".
"Google and Gmail will be filtered throughout the country until further notice," an official identified only by his last name, Khoramabadi, said, without giving further details.
The Iranian Students' News Agency (ISNA) said Google ban was connected to the anti-Islamic film posted on the company's YouTube site which has caused outrage throughout the Muslim world. There was no official confirmation.
Iran has one of the biggest Internet filters of any country in the world, preventing normal Iranians from accessing countless sites on the official grounds they are offensive or criminal.
But many Iranians believe the block on sites such as Facebook and YouTube is due to their use in anti-government protests after the disputed re-election of President Mahmoud Ahamdinejad in 2009.
Sites expressing views considered anti-government are also routinely blocked.
Iranians commonly overcome the government filter by using virtual private network (VPN) software that makes the computer appear as if it is based in another country.
But officials have long spoken of creating an Iranian Internet system which would be largely isolated from the World Wide Web.
"In recent days, all governmental agencies and offices ... have been connected to the national information network," deputy communications and technology minister Ali Hakim-Javadi was quoted as saying by the Mehr news agency.
The second phase of the plan would be to connect ordinary Iranians to the national network, he said.
According to Iranian media, the domestic system would be fully implemented by March 2013 but it was not clear whether access to the global Internet would be cut once the Iranian system is rolled out.
Even using VPNs, many Iranians suffered serious problems accessing email and social networking sites in February, ahead of parliamentary elections.
The Islamic Republic tightened cyber security after its nuclear programme was attacked in 2010 by the Stuxnet computer worm, which caused centrifuges to fail at its main uranium enrichment facility.
Tehran, whose nuclear programme is suspected by the West of being aimed at developing a bomb, accused the United States and Israel of deploying the worm.
Authorities said in April a computer virus was detected inside the control systems of Kharg Island - which handles the vast majority of Iran's crude oil exports - but the terminal remained operational.
Communications and Technology Minister Reza Taqipour said last month Iran needed to develop its own network to ensure the safety of the country's information.
"Control over the Internet should not be in the hands of one or two countries," he said. "Especially on major issues and during crises, one cannot trust this network at all."
Iran threatened in May to take legal action against Google over its decision to drop the term "Persian Gulf" from its Google Maps and leaving the waterway between Iran and the Arabian peninsula nameless.
Many Arab states refer to the sea as the "Arabian Gulf", a term Iran considers unacceptable.
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