According to The Telegraph, billionaire opposition leader Amir Jahanchahi and former senior Iran Revolutionary Guard commander General Reza Madhi have formed the opposition "Green Wave" party to protest against the hardline tactics of the government.
Both have reportedly teamed up to target insiders to undermine the government and its grip on the powerful oil industry.
There is a belief that widespread street protests could trigger democratic changes in Iran.
So far, Iran was able to keep a lid on signs of dissent.
The domestic opposition has not been able to organize any protests.
The opposition movement, spearheaded by presidential candidates Mir-Hossein Mousavi and Medhi Karroubi, has been destroyed by the imprisonment of its leaders and intimidation of its supporters.
Leading opposition leaders in the West now believe that disaffected members of the Islamic Revolutionary Guard Corps are ready to turn on the hardliners of the regime.
Shirin Ebadi, a former judge who won the Nobel Peace prize for her opposition work, said that the Revolutionary Guard had started to splinter, a momentous development that threatened to imperil the regime.
Jahanchahi said: "We can bring the regime to its knees without street protests. Ahmadinejad has stolen the wealth of the Iranian people but in the next 12 months we will be able to show that we can target the energy sector with tactics that will cut off the revenue that the regime depends on for its survival."
Oil-rich Iran generates over 60 billion dollars a year from oil exports and relies on the industry for more than half its official revenues. (ANI)