With 65 per cent of the vote counted, Chavez had 56 percent compared to 39 per cent for Yale-educated businessman Henrique Salas Romer, according to official results yesterday from the national electoral council.

People danced in the streets, set off fireworks and honked their horns in celebration. ``Venezuela is being born again,'' Chavez declared when results were announced. He appealed for calm and said he would pursue prudent economic policies.

Because of Chavez's meteoric rise in the polls, the vote had turned into a confrontation between rich and poor and a warning sign for the rest of Latin America.

``These are historic elections. Nothing like these elections has happened in Venezuela's politicalhistory,'' said US ambassador John Maisto.

Chavez, speaking to media persons, renewed his pledge to end poverty and corruption, saying he would not allow a Venezuela where children lived in the streets and would `put an end to large-scale spending without control'.

Chavez denied that he intended to renege on the country's 23 billion dollar foreign debt, but said he would seek easier terms. He also pledged to impose strict fiscal discipline and slash public spending.