By Khaled Farhan

NAJAF, Iraq, Sept 6 (Reuters) - The United Nations representative in Iraq held a rare meeting with the country's most senior Shi'ite Muslim cleric on Saturday and warned that delays to provincial polls may undermine local authorities.

Staffan de Mistura met Grand Ayatollah Ali al-Sistani at his home in the holy city of Najaf for the second time since he took the position as head of the U.N. mission in Iraq last year.

Sistani, who wields vast influence over Iraq's majority Shi'ites, rarely meets Western officials.

The United Nations has pushed hard for provincial elections, seen as essential for reconciliation with Iraqi factions that boycotted previous polls, to be held as soon as possible.

The elections had been scheduled for Oct. 1, but delays in approving a law allowing them to take place appear likely to have them postponed to late this year or early 2009.

"(With) the lack of a formula to legitimise the election law, we are in danger of delegitimising the current provincial councils," De Mistura told reporters after the meeting.

Local councils have considerable power in each of Iraq's 18 provinces. The elections law has largely been delayed by a bitter row over the northern oil-rich city of Kirkuk, whose control is disputed by its Arab, Kurd and Turkmen inhabitants.

The argument torpedoed a draft elections bill in August, leaving the issue to be taken up again by lawmakers after parliament's summer break ends on Sept. 9. The delay has frustrated the United States and the U.N.

The U.N. envoy said he had discussed politics and the economy with Sistani, but did not elaborate. Sistani has been careful to avoid being embroiled in politics.

An official close to Sistani said the cleric hopes the provincial elections are held "as soon as possible".

Many Iraqis who boycotted the previous polls in 2005, particularly Sunnis, are growing increasingly restless with current provincial administrations, and tensions have threatened to spill over into violence.

The polls may go ahead this year even if the elections law is not passed by using an old law instead, Iraqi Vice President Adel Abdul-Mehdi said in a television interview on Thursday. (Writing by Mohammed Abbas: Editing by Diana Abdallah)

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