The Stalinesque statue of the late Geidar Aliyev was erected by the Azerbaijani Embassy, which paid for the renovation of part of the city park where it sits and other public works totaling about $5 million. Aliyev has been criticized for repressing opponents and critics.
The commission of three writers and analysts appointed by the city government said authorities erred by accepting money to allow a foreign government to essentially decide which political figures or historic events should be commemorated in the capital's public spaces.
"In view of the majority opinions of the citizens and neighbors, the sculpture of Geidar Aliyev should be removed from the emblematic spot" on the Reforma boulevard, commission member Guillermo Osorno said.
The panel suggested that a citizen board be set up to review such proposals in the future.
"We believe that monuments or street names that are offensive, hurtful, or which make unilateral judgments on international disputes should not be installed in public spaces," Osorno said.
Protesters have said they are offended by a monument to an authoritarian figure like Aliyev, who led Azerbaijan first as Communist Party boss during Soviet times and then as president from 1993 until his death in 2003.
Critics' anger has been amplified by a plaque on Aliyev's statue that describes him as "a brilliant example of infinite devotion to the motherland, loyal to the universal ideals of world peace" and by the location of the statue not far from monuments to Mahatma Gandhi, Abraham Lincoln and Mexico's national heroes.
Writer and activist Homero Aridjis said the city government has a problem: the money it accepted from the Central Asian nation, which might have to be returned.
"The problem is the money. If it were just a political issue, they'd make the decision without any further ado," he said.
"They have to remove the statue," said Aridjis, who participated in protests against the monument. "They have no other choice. It would be a happy ending to a sordid story."
Azerbaijani Ambassador Ilgar Yusif oglu Mukhtarov said that although he didn't agree with some of the commission's recommendations, he would discuss them with city authorities to find a resolution that everyone agreed with.
Mukhtarov charged that the government of Armenia, with which Azerbaijan has tense relations, and local Armenians were behind the campaign to remove Aliyev's statue.
"We are aware that the current situation was driven by the Armenian government and the Armenian local diaspora in an attempt to discredit the work, life and dedication of Azerbaijan's national leader," Mukhtarov said a news conference.
Last month, the embassy suggested in a statement that removing the statue could affect diplomatic relations. It said the city government had signed an agreement stipulating the monument should be allowed to remain in the spot for 99 years.
The city government's press office said authorities hadn't made a decision yet on whether to follow the commission's recommendation.
Mayor Marcelo Ebrard was somewhat evasive, saying, "We are going to review it carefully ... and we will reply."
Osorno, however, said the city government has already offered Azerbaijan a cultural center where the statue could be displayed indoors. That "would be more appropriate," he said.
The issue was particularly thorny because the city government prides itself on its progressive policies and respect for human rights. Some officials have suggested authorities weren't really aware of who Aliyev was when the monument was approved.
The advisory commission also recommended that a second Azerbaijani-funded monument in the downtown Tlaxcoaque plaza be changed.
That statue depicts a woman, her arms uplifted in mourning, commemorating Khojaly, a village where hundreds of Azerbaijanis were reportedly killed during Azerbaijan's conflict with Armenia over the Nagorno-Karabakh region.
The commission said a plaque on the monument calling it "genocide" was misleading. Genocide is a term more commonly applied to the killing of about 1.5 million Armenians in the region in 1915.
Moreover, the Tlaxcoaque plaza was the site of a police torture and detention center that collapsed in Mexico City's 1985 earthquake. The commission said it would be more appropriate to commemorate Mexicans who died there.
"We think this space should be dedicated to the victims of forced disappearance, torture and execution," Osorno said.