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The Interpolated Discrete Fourier Transform (IpDFT) represents the current state-of-the-art about DFT-based synchrophasor estimation (SE) algorithms for P-class Phasor Measurement Units (PMUs). However, the IpDFT is not robust against the interference produced by interharomonics (i.e., components characterized by frequencies that are not integer multiples of the fundamental one) and, therefore, it is not suitable for M-class PMUs. We propose an iterative-IpDFT (i-IpDFT) SE algorithm that iteratively compensates the effects of the spectral interference produced by both the interharmonic tone and the negative image of the fundamental tone. We assess the performance of the i-IpDFT with respect to all the operating conditions defined by the IEEE Std. C37.118-2011 for M-class PMUs, and demonstrate that the method is compliant with all the accuracy requirements.