The trial in Oman of a Web moderator over criticism of the government in a popular Internet forum has led to calls for the Gulf Arab state to ease its grip on the media and improve business transparency.

Ali al-Zuwaidy was detained for 11 days earlier this year for questioning over an anonymous post suggesting corruption in state telecom firm Omantel and for publishing a cabinet directive putting an end to live radio phone-ins.

A verdict in Zuwaidy's trial is due on April 21.

It is the latest in a series of legal cases concerning Internet blogs, forums and websites in the Arab world, where rights groups say governments are clamping down. The Internet has become a popular arena for discussion partly because of restraint observed in traditional media.

Oman, a country of 3.3 million people on the tip of the Arabian peninsula, has one of the most closed media and political cultures in the Gulf region, analysts say.

We view this case as threatening freedom of expression in the country and we think it is not in the interest of the state's development efforts, said Said al-Hashemi, a member of the Omani Writers Association which has provided legal aid for Zuwaidy, a writer and civil aviation administrator.

There is corruption in some institutions. If we don't have the right to criticize then there is a problem, Hashemi said, adding that three journalists were detained briefly last year over reports they published in Omani papers.

Ministry of Information officials declined to comment when contacted by telephone.

Live broadcasts of a popular morning radio show where Omanis call in to discuss issues of governance were stopped last year, journalists say. A document saying the cabinet ordered ban was published on the Sablat Oman forum last year.

Omani newspapers have said that Zuwaidy, who could face a total of four years in prison and hefty fines, is accused of publishing a confidential document that he obtained in his capacity as a state employee and insulting the former Omantel CEO, Mohammed al-Wohaibi.

Wohaibi resigned last month, citing personal reasons. Omantel bought Pakistan's Worldcall Telecom last year, a controversial investment seen as contributing to a slowdown in Omantel's fourth quarter net profit.

The government is trying to increase foreign investment in Oman, offering tax breaks and other incentives.

Mohammed al-Balushi, an editor at the daily al-Shabiba, said Web forums had become a popular venue for debate and revealing information -- though Internet penetration is low -- because of an atmosphere of self-censorship in the press.

The radio program was popular. Why should there be a trial? The show offered a service to the public, he said.

A diplomat said the trial was part of a wider targeting of Web sites. The government amended a telecoms regulatory law last year to include Internet crimes. A court acquitted a Web site owner two years ago over comments critical of officials in a country whose elected parliament only advises on laws.

(Editing by Thomas Atkins)