CARACAS, Venezuela - Venezuelan President Hugo Chavez has gained fresh energy for his left-wing populist "revolution" and new democratic credentials with his resounding victory in Sunday's referendum.

His stunned opponents, who had focused their campaign on portraying him as an inept dictator afraid of elections, are now licking their wounds. They must repair their battered image if they hope to challenge Chavez in the next presidential election in 2006.

"This is a triumph for Chavez. It certainly renews his credentials in the short term, but he will have to work on his economic and oil policies, reducing political polarization and seeking a rapprochement with the private sector," said Michael Penfold, a political analyst at Caracas' IESA business school.

Basking in international recognition of his victory, the Venezuelan leader is promising to accelerate his policies to spread the petro-dollar riches of the world's No. 5 oil exporter more fairly among its largely poor population.

"Venezuela has changed for ever. There is no turning back," Chavez said after winning 58 per cent of the vote in Sunday's poll.

The opposition polled 42 per cent, a crushing disappointment for a broad but fractious coalition that had staked all on unseating the voluble former paratrooper who dismisses them as a rich but selfish minority.

Already suffering from internal recriminations over their defeat, opposition leaders are crying fraud, although international observers have endorsed Chavez's victory.

Opposition leaders are accusing the government of manipulating voting machines to overturn what they assert was a win for the anti-Chavez vote. They demand an exhaustive one-by-one count of all the confirmation paper ballots produced by the voting machines.

Oil price windfall

The US, Venezuela's biggest oil client, considered the referendum "an important end to Venezuela's political crisis", State Department spokesman Adam Ereli said in Washington.

Record high oil prices will initially help fiery nationalist Chavez maintain the generous social spending that has been a hallmark of his rule since he was first elected in 1998. He increased this spending before the referendum.

"Why did he win? Voters liked his social programmes, people want social improvement," Penfold said. "The opposition didn't provide a stable alternative and people look for stability."

Relieved financial and oil markets greeted his win as the least risky short-term scenario for oil-rich Venezuela, where Chavez's rule has provoked often violent political conflict.

These markets used to wince at Chavez's acerbic anti-capitalist rhetoric but they recognize that his self-styled "revolutionary" government is careful to pay its debts on time and practices a pragmatic financial policy.

Nevertheless, the small Caracas stock exchange closed down 6.6 per cent on Tuesday, hit by a sell-off in leading stocks following Chavez's victory.

Opposition leaders have ruled out any attempts to topple Chavez by force, such as the 2002 coup that briefly ousted him.

On media talk shows, frustrated anti-Chavez voters are already venting their anger against the opposition leadership. Many criticize them for spending more time talking on television than campaigning in poor slums and hamlets.

The opposition's calls for protests have received a muted response among a population weary of political feuding.

(Agencies via Xinhua)