The demonstrators said they are outraged by 26 laws that Chavez has just decreed, some of them resembling the measures voters rejected in a December referendum.

Chavez said in a speech on Wednesday night that their concerns are grossly overblown.

He issued the decrees just before the expiration of special legislative powers that allowed him to make laws without national assembly approval for the past 18 months.

Opposed by businessmen

Besides politicians, the decrees have also encountered opposition from Fedecamaras, the Venezuelan federation of chambers of commerce.

Jose Manuel Gonzalez, a business chamber leader of Fedecamaras, said: "We ask the president: Why does he fear democracy?"

He said that the package of laws included socialist concepts that voters rejected last year as part of a proposed overhaul of Venezuela's constitution.

"We are sure that this is nothing more than imposing the reform project that was rejected in December," Gonzalez said. 

Last week Chavez separately announced plans to nationalise Banco de Venezuela, a private bank belonging to Spain's Grupo Santander.

One decree establishes a civilian militia that critics say could emulate the citizen groups that control many aspects of community life in Cuba.

Another gives Chavez the ability to designate regional authorities who critics say could undermine the power of locally elected officials.

Other decrees empower Chavez to expropriate goods from private businesses and increase state control over food, punishing business owners who fail to comply with price controls or other regulations with fines, closure and even 10-year prison terms.

Another law, according to Chavez, will strengthen the military by establishing regional zones headed by single commanders and bringing together army, air force, navy and national guard forces.

Opposition blacklist

The decrees came just as the supreme court, whose justices were appointed by the Chavista-dominated national assembly, on Tuesday upheld a decision by Venezuela's chief anti-corruption official to bar 272 largely opposition-aligned candidates from running.

The blacklist was drawn up by Clodosbaldo Russian, the Venezuelan comptroller-general, a Chavez ally.

None of the candidates on the list have been convicted of corruption or other crimes.

Opponents say that some pro-Chavez politicians who have been publicly accused of corruption are not on the list, and there is little chance that supreme court justices will rule against Chavez if an appeal is made

A day after upholding the blacklist, the court on Wednesday dismissed a challenge by Leopoldo Lopez, a Caracas mayoral candidate, and five other blacklisted politicians.

Lopez led protesters in Caracas on Wednesday before police in riot gear blocked them in front of a government building, tossing tear gas canisters into the crowd.

Protest leaders vowed more marches, including a larger one on Saturday.