Venezuela's Chavez gets powers to rule by decree

CARACAS, Jan 31 (Reuters) Venezuela's Congress today granted President Hugo Chavez powers to rule by decree for 18 months as he tries to force through nationalisations key to his self-styled leftist revolution.

The vote allows anti-US leader Chavez, who has been in power since 1999, to deepen state control of the economy and other sectors of public life such as defense and security.

Afternoon headlines in the anti-Chavez press were scathing.

Tal Cual splashed with ''Heil Hugo'' and equated the enabling law with powers granted to Nazi leader Adolf Hitler in the 1930s.

El Mundo had the headline ''Superchavez enabled.'' The lawmakers, all loyal to Chavez after opposition parties boycotted the 2005 congressional elections, flaunted their populist credentials by taking the unusual step of holding their vote in public in a square in downtown Caracas.

''We in the National Assembly will not waver in granting President Chavez an enabling law so he can quickly and urgently set up the framework for resolving the grave problems we have,'' said congressional Vice President Roberto Hernandez.

The economic reforms are set to work in tandem with increased political centralisation. Chavez is forging a single party to lead his radical reforms, stripping the central bank of autonomy and seeking indefinite re-election.

The vote was applauded by hundreds of Chavez supporters in red T-shirts, carrying placards such as ''With Chavez, the people rule'' and ''Venezuela toward socialism.'' Chavez has targeted the oil industry, power utilities and the country's biggest telecommunications firm for takeover, affecting many foreign owners and shareholders.

STEP TOWARD TYRANNY? Washington's initial response was muted, saying the United States would wait to see what Chavez does with his new powers.

''We, along with the rest of the hemisphere, will be keeping a close eye on how the enabling law is used. But at the end of the day, this is not so much a question for the United States and other nations as for the Venezuelan people,'' US Assistant Secretary of State Thomas Shannon told reporters in Bogota.

Chavez's opponents at home were more cutting.

The opposition accuses Chavez of being a tyrant in the making, taking a slow-burning approach to following Cuban leader Fidel Castro. Chavez argues he will always tolerate opposition and will step down if he loses an election.

Julio Borges, leader of an opposition party Primero Justicia, said he found the vote worrying.

''Unfortunately, what I think we are going to see in the next 18 months is a still greater separation between power and the Venezuelan people,'' he said.

Opposition politician and newspaper editor Teodoro Petkoff wrote in today's Tal Cual: ''The enabling law is designed to consolidate and reinforce the autocracy that has been developing for eight years.'' Hernandez, of the Venezuelan Communist Party, rebuffed such charges.

''When our enemies say we are granting dictatorial powers to Chavez, they know that they are lying,'' he said.

Reuters SBA VP0144