Chavez likely to retain parliament in Venezuela vote

CARACAS (Reuters) - Venezuelans voted for a new parliament on Sunday, with President Hugo Chavez expected to keep control of the National Assembly in a poll that tests his support ahead of the next presidential election in 2012.

Wearing a tracksuit top in the red, yellow and blue of the Venezuelan flag, Chavez arrived to vote at a school in a Caracas slum in a modest red sedan that he drove himself.

"Those who are against, those who are in favour, let us all vote," he told reporters, adding that he was happy the opposition had agreed to take part.

Chavez is not on the ballot, but his larger-than-life personality has dominated the campaigns -- and exposed stark political differences in a country with vast oil and mineral wealth and a huge gap between rich and poor.

Opposition parties in South America's biggest oil producer are guaranteed to make big gains after they boycotted the last legislative election five years ago.

The focus is on whether they can take more than a third of the 165 seats up for grabs, which would mean the socialist president would need support from his foes for major changes to laws or to make appointments to important institutions.

As polls closed, government sources expressed confidence of winning at least the 110 seats needed to keep a two-thirds majority and avoid that scenario.

But opposition sources contradicted that, saying they believed they had broken the one third barrier.

Officials at the election count centre in Caracas said

first results were about to be given, but by 11 p.m. local time (4:30 a.m. British time) there was still no official data.

Before dawn, Chavez supporters had awakened residents in sprawling shantytowns and elsewhere with fireworks, horns and loudspeakers proclaiming: "Let's vote for the president!"

The former paratrooper is hailed by fans as a champion of the poor, but denounced by critics as a boorish dictator. His popularity is in the 40 percent to 50 percent range -- well below his highs of previous years but probably enough to ensure his ruling Socialist Party retains a majority.

"This revolution must be saved," Aura Querales, a 63-year-old pensioner wearing a bright red T-shirt, said after casting her ballot in the west of Caracas.

POLARIZATION

In addition to the president's polarizing personality, the peaceful campaign has focussed on Venezuela's shocking crime statistics and dire economic situation. Sky-high inflation has worsened a second year of recession.

A big win would boost Chavez ahead of the 2012 presidential poll, when he will run for re-election in what would be his 14th year in power. In that time, he has become one of the world's most recognizable -- and controversial -- politicians.

The 56-year-old was first elected president in 1998, six years after leading a failed coup that won him national prominence. He later launched his self-proclaimed "Bolivarian Revolution" -- named for independence hero Simon Bolivar.

According to polls before the vote, the Socialists were a couple of percentage points ahead of a newly united opposition umbrella group, Democratic Unity. Combined with changes to voting rules and the electoral map that favour the government, analysts say, that means Chavez's party is favourite to win.

Opponents, however, say there is a wave of disenchantment with the president that will prove the polls wrong.

Dora, a 33-year-old Petare hairdresser who did not want her second name used, said she was awakened before 4 a.m. by noisy "Chavista" neighbours. She was voting for the opposition.

"Since the attempted coup of '92, I've never liked that man. He is violent and I don't trust him," she told Reuters.

In television images of polling stations from rural villages in the Amazon and Andes, to the slums of Caracas, small and orderly queues formed at the polls.

Investors are paying close attention to the vote, particularly because debt issued by the government and state oil company PDVSA offer very high yields for those willing to bear what some consider a significant chance of default.

Its benchmark dollar-denominated 2027 global bond has risen over the last week thanks to the nonviolent run-up to the vote and investor appetite for risk.

Some market players hope for opposition gains because they are wary of nationalizations by Chavez that have put a wide swath of the economy under state control, including multibillion-dollar oil projects run by U.S. majors.

(Additional reporting by Andrew Cawthorne, Frank Jack Daniel, Eyanir Chinea, Patricia Rondon, Marianna Parraga, Enrique Andres Pretel and Deisy Buitrago; editing by Christopher Wilson)