UPDATE 2-Chavez says decree powers may last 18 months
* President once again seeks to outwit opposition
* Move will bring criticism of dictatorial drift (Adds details throughout)
CARACAS, Dec 13 (Reuters) - President Hugo Chavez sought to outflank Venezuela's rejuvenated opposition on Monday by vowing to assume decree powers for up to 18 months in a move bound to heighten criticism he is stifling democracy.
The charismatic socialist leader and U.S. critic justifies the measure as an emergency response to floods that have made 130,000 people homeless -- but it is also clearly a preemptive step before a less compliant parliament convenes on Jan. 5.
Chavez accepted the results of a September vote that gave opponents about 40 percent of seats in the 165-member National Assembly. Opposition parties had feared he would simply bypass parliament rather than face a brake on power.
"We'll show them what we're capable of!" Chavez said, waving a copy of the special "Enabling Law" his Cabinet is preparing to submit to the outgoing parliament on Tuesday.
Opposition parties were furious.
"This is madness, a lack of respect for the popular will and a coup d'etat against the constitution," opposition politician Pastora Medina told Reuters.
"He's consolidating himself as a dictator."
Minutes before his announcement, Chavez took state TV cameras on a walkabout in his presidential palace, interviewing homeless women sheltering there and showing children playing around an ornate fountain in a cobbled square.
The unashamedly populist president, who has inherited Fidel Castro's mantle as Latin America's leading opponent of Washington, still has a strong power base among Venezuela's poor whom he says were ignored by past right-wing governments.
Currently dominated by the ruling Socialist Party, the National Assembly is sure to pass the law, giving Chavez the decree powers he has exercised three times before in his rule.
He announced plans to raise sales taxes using the decree powers, saying he needs extra funds for the disaster. That move will please holders of Venezuela debt, keen to see signs of fiscal strength in the recession-hit oil exporter. [ID:nN13268482]
POWERS COULD LAST 18 MONTHS
Opposition parties have said it would be illegitimate to extend the measure beyond Jan. 5, but Chavez taunted them as "crazy" and "in need of Valium" during a live TV address.
"These are signs of a desperate opposition, a desperate bourgeoisie and ultra-right movement," Chavez said.
He said the powers would last a minimum of 6 months and up to 18 months. "They could be 20 years too," he added, laughing as he jibed at opponents and read reports of their criticism.
Chavez has used decree powers three times before to pass about 100 laws, including measures to nationalize part of the oil sector and increase the number of Supreme Court judges.
Though he has said the powers are necessary to address the flooding and rebuild homes and infrastructure, opponents fear he will use them to step up his drive to entrench "21st-style socialism" in Venezuela.
Chavez, who wants to be reelected president in 2012, has generally outflanked Venezuela's opposition during his 11 years in office, sometimes intimidating them and generally beating them at the ballot box.
In the past, he has always accepted election results, but used a variety of methods to undermine some results.
When he lost a constitutional referendum in 2007, he held a similar vote two years later and won. And when an opponent, Antonio Ledezma, won the Caracas mayorship, he cut his powers and named another official to take over many responsibilities.
It is not clear what other laws Chavez will pass with the decree powers, but he could use them to find funds in a number of ways, including a widely rumored currency devlauation.
An emergency housing law allowing the government to seize vacant properties in cities, new rules to regulate the Internet and a law that will take some profits from banks are among bills currently on the parliamentary agenda.
Chavez has made it clear a priority is to find land for new housing and farming, raising fears among property owners of a new wave of nationalization.
Despite criticisms he is an autocrat, many among Venezuela's poor say Chavez has in fact ushered in greater democracy through increased participation in politics and decision-making, with grass-roots councils and other organizations giving communities funding for public works. (For Q&A on decree powers, see [ID:nN13230687]; for a fact box on Chavez' presidency, see [ID:nN13237877] (Additional reporting by Deisy Buitrago; editing by Todd Eastham)
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