``The bodyguards stay for now. Salman's situation is being reviewed but I expect he will remain very cautious. We always knew this was going to be a vulnerable time,'' Frances D'Souza, spokeswoman for Article 19, the human rights group which has championed Rushdie's cause, told Reuters.

An Iranian newspaper reported that the head of the 15th Khordad Foundation had increased its $ 2.5 million bounty on the British author's head by $ 300,000.

On Saturday, a hardline student group was also reported to have offered one one billion riyals ($ 333,000) to anyone who carried out the fatwa, or religious order, to kill Rushdie.

The late revolutionary Iranian leader Ayatollah Ruhollah Khomeini issued the fatwa against the author for alleged blasphemy in his book `The Satanic Verses'.

``We had deliberately beenkeeping quiet about (the bounty issue), thinking things needed to settle down. But we are getting increasingly worried. The foundation's decision is much more worrying (than the students'),'' D'Souza said.

Rushdie, having spent the last 10 years under British police protection, had hailed Iran's decision last month to end official calls for his death as the beginning of his return to normalcy.

Rushdie will meet British Foreign Secretary Robin Cook in the next two days to discuss recent developments, she said. The foreign office said it deplored any attempt to put a price on a British citizen's head and that no bounty offer had the backing of the Iranian authorities.

But D'Souza suggested the foundation must have the implicit blessing of the Iranian government as, she said, no religious organisation could operate without state permission. ``The foundation has no money of its own so where's the money coming from? These questions have to be answered,'' D'Souza said.

In September, Iran and Britain saidthey would upgrade diplomatic ties to the ambassadorial level after the Iranian Government dropped its threat to Rushdie and the British Government dissociated itself from the contents of the book.

The Rushdie affair has been at the centre of tension between Britain and Iran since Khomeini issued the order a few months before he died in 1989.

Iran-ld rushdie two last

Rushdie, having spent the last 10 years under british police protection, had hailed iran's decision last month to end official calls for his death as the beginning of his return to normality.

Rushdie will meet british foreign secretary robin cook in the next two days to discuss recent developments, she said.

The foreign office said it deplored any attempt to put a price on a british citizen's head and that no bounty offer had the backing of the iranian authorities.

But d'souza suggested the foundation must have the implicit blessing of the iranian government as, she said, no religious organisation could operate without statepermission.

"The foundation has no money of its own so where's the money coming from? these questions have to be answered," d'souza said.

In september, iran and britain said they would upgrade diplomatic ties to ambassadorial level after the iranian government dropped its threat to rushdie and the british government dissociated itself from the contents of the book.

The rushdie affair has been at the centre of tension between britain and iran since khomeini issued the order a few months before he died in 1989.