The Venezuelans said no to President Hugo Chavez in the referendum that was expected to have a different outcome. If the voting would have gone the other way, Chavez would have had the right to run for re-election for an indefinite period, thus having the possibility and means to impose a socialist system in Venezuela, a major U.S. oil provider.

There was an abstention rate of about 44 per cent and with over 88 per cent of the ballots counted, 50.70 per cent of the Venezuelans voted against Chavez’s reforms, while 49.29 per cent were in favor of it. Tibisay Lucena, the president of the National Electoral Council (CNE), stated that the tendency was irreversible.

Chavez acknowledged his defeat as soon as he found out about the outcome of the referendum. He "thanked and congratulated" everybody for taking part at the referendum and mentioned that his thanks go even to those who voted against the reform because they did it democratically.

"Please, know how to handle your victory," Chavez said to the almost 51 per cent who voted against him.

His speech held in front of his followers immediately after the electoral authorities announced his defeat lasted for about an hour.

"We did not obtain 50 per cent plus one vote. But we almost did," said the former career military officer.

"This proposal is alive, it is not dead," Chavez added underlining the fact that he will keep trying to implement the controversial reform which would have paved the way for a socialist form of government and allowed the unlimited re-election of the president.

The outcome of this referendum comes as a bit of a surprise not only for Chavez and this especially because the fact that the controversial left-wing populist had won all previous elections and referendums since he took office in 1999 with at least 60 per cent of the vote. Many have accused Chavez of having a dictatorial way of governing.

"We respect the rules of the game. We have said so, but it is not the first time," said Chavez and also noted that "the Venezuelan democracy is maturing". He also said that if he would have won the referendum in a similar fashion – with just 51 per cent - "I would not have wanted that victory".

The Caracas inhabitants were urged to vote and government supporters roused them on Sunday, starting at 4 am, with trumpets and fireworks. Long queues had been forming at polling stations and the voting began at 6 am (1000 GMT).