He also hit out at the opposition governors in those states warning military leaders that the two men might attempt to flout the new law.

"If he gets smart ... that deserves prison," Chavez said of Henrique Salas, the Carabobo governor. "The same goes for the governor of Zulia [Pablo Perez]."

'Security issue'

The Venezuelan president has described the new legislation as a "security issue", but the opposition has accused him of undermining elected officials in their regions and concentrating his power.

Under the law, states and municipalities can no longer collect tariffs at transportation hubs or establish tolls along highways, meaning governors and mayors will have less money for local public projects.

In elections in November, Chavez's allies won 17 of 22 gubernatorial races, but opposition leaders gained ground, winning five governorships and the Caracas mayor's office.

Although the opposition accuses him of using state resources to promote his own political agenda, Chavez is broadly popular among the country's poor for his social programmes financed with oil revenues.