Chavez seeks re-election reform in Venezuela vote

CARACAS (Reuters) - Venezuelans voted on Sunday on a reform proposal that would allow President Hugo Chavez to stay in power for as long as he keeps winning elections, his second bid to extend his rule after a decade in power.

Chavez, a socialist who says he needs at least another ten years to complete his revolution, holds a slim edge in polls but many Venezuelans remain undecided.

A former soldier who often challenges U.S. influence, Chavez lost a vote in December to lift term limits and if he loses his second try he would have to leave office in 2013 or find another way to change the rules.

Booming fireworks, car horns and recordings of military bugles played from trucks woke up residents in Caracas, where Venezuelans started lining up at the polling stations before dawn.

Spearheaded by a student movement, the fragmented opposition's campaign slogan is "No is No," referring to Chavez's failed 2007 effort to rewrite the constitution so he could extend his rule in the OPEC nation.

Confident of victory this time, Chavez said on Saturday a win would reinforce his mandate to create a socialist state and challenge Washington in Latin America.

"This will strengthen my faith in what we are doing," the 54-year-old president said.

But with oil prices more than $100 a barrel lower than their peak seven months ago, Chavez has far less income to spend on his programs of clinics, schools and food hand-outs for the poor Venezuelans who have consistently backed him.

Venezuela's currency and sovereign debt have lost value in recent months as investors worry his Cuban-inspired socialist "revolution" will burn through international reserves.

The Venezuelan leader, who calls Fidel Castro his mentor, has carved out a place for himself as the standard bearer for anti-U.S. sentiment in the region, wielding his nation's oil to counter U.S. free-market proposals.

Leftist allies in Ecuador and Bolivia have joined Chavez in rewriting constitutions to extend their rule and increase state control over their economies in the name of bringing wealth to the neglected poor majority.

FEAR TACTICS

Chavez warns poor supporters they could lose social programs if he is unable to run again for re-election. He has also adopted a familiar tactic of accusing the opposition of joining a coup plot directed from the United States and planning to cry fraud if he wins.

But Chavez, who once led a failed coup, has shown resilience. He survived a putsch and national strikes and has won all but one election since first coming to office in 1999 as an underdog vowing to sweep away corrupt elites.

Venezuela used to be best-known for its Caribbean beauty queens, but now most people recognise the major oil exporter for its larger-than-life leader and his harangues against the "evil empire" of the United States.

Still, with the vote falling on Valentine Day's weekend, he has shown his softer side and appealed to voters' passions.

Campaign fliers list the No. 1 reason to vote 'Yes' as "Chavez loves us and love is repaid with love." The second is "Chavez is incapable of doing us harm."

Opposition leaders say Chavez wants to become a communist dictator in a country with one of Latin America's oldest democracies. After making gains in votes in the last two years, they complain he has used state resources in his campaigns.

Chavez deported a European lawmaker on Friday for questioning the impartiality of the electoral authority.

Two pollsters -- Datanalisis, which works for the public and private sector, and Consultores 30.11, which works for the government -- gave Chavez a lead of between 5 points and 7 points ahead of Sunday's vote. They also showed he had widened his lead slightly since January.

But both surveys conducted during the final week of the campaign said more than 10 percent of Venezuelans who planned to vote were still undecided, making the outcome hard to predict. The referendum result is expected to be announced late on Sunday.

(Additional reporting by Saul Hudson, editing by Anthony Boadle)