Mesa had offered to resign on Monday following two weeks of protests and strikes, hoping to end the conflict which he said rendered Bolivia "ungovernable."

But Bolivia's 157 lawmakers late on Tuesday took less than five minutes to reject Mesa's resignation offer. Mesa reciprocated shortly thereafter, telling lawmakers that he will continue in his post.

"I am willing to keep working with Congress," he said. "I want Bolivians to support their president."


Leftist political parties and labour and farmer organisations have mounted a campaign against Mesa for weeks, sparked by their anger over a proposed law on taxing foreign oil firms.

The government proposed to levy royalties of 18% on foreign companies producing natural gas and oil. Opposition leader Eyo Morales wants the royalty raised to 50%.

Mesa says a steep royalty would drive away foreign investment.

Twenty-six foreign oil companies have contracts to exploit Bolivia's large natural gas and oil resources, including Total of France, Brazil's Petrobras, British Gas, Exxon Mobil of the United States, Repsol of Spain and PlusPetrol of Argentina.