UPDATE 2-Ecuador's Correa heads for large referendum win

(Recasts, adds Correa, Chavez, analyst quotes)

By Alonso Soto

QUITO, April 15 (Reuters) - Ecuadorean President Rafael Correa appeared set for a landslide win in a referendum on Sunday that could enable him to wrest control from a Congress reviled as corrupt in the politically unstable country.

The latest Cedatos-Gallup poll tipped Correa, a leftist and friend of Venezuelan President Hugo Chavez, to win an emphatic 66 percent of the vote to set up an assembly to rewrite the constitution.

Correa, who has maintained huge popularity since taking office in January by confronting traditional political elites, wants the new body to strip powers from a Congress seen as having vested interests in state firms and the judiciary.

"This is a victory for the people, for democracy and for our country," a smiling Correa said as hundreds of screaming supporters crowded around him and his armed bodyguards.

Correa, who has spooked foreign investors with threats to stop making debt payments, has staked his political career on the vote, saying he could resign if he fails to win a convincing victory.

"The thought of the assembly gives me hope for my children and grandchildren," said Nelly Deprocel, 65, voting in the capital Quito as did millions of other Ecuadoreans from the Andes mountains to the Amazon rain forest. "I want change."

The president is adopting a tactic similar to that used by other leftist presidents in the region, Chavez and Bolivian leader Evo Morales, who also called referendums soon after taking office seeking to emasculate traditional parties.

"We wish all the best luck to the people of Ecuador and to President Correa, who has courageously and bravely adopted the socialism of the 21st century," Chavez said at an event in Venezuela with Morales nodding in agreement at his side.

ECUADOREAN FAULT LINES

The referendum has exposed sharp fault lines in Ecuador's volatile politics. The country, the world's top banana exporter, has had eight presidents in a decade, three of them toppled in popular and congressional unrest.

More than half of Ecuador's congressmen were fired last month after a tussle with Correa over the referendum. They fought with police to get back into the chamber but were ultimately sidelined when Congress convened with substitutes taking their place.

A clear win on Sunday will bolster Correa's mandate and allow him to push ahead with initiatives such as ending the lease on a major U.S. military base, renegotiating oil deals and reworking the national debt.

The opposition fears Correa could become too powerful, centralizing government around himself as Chavez has done in Venezuela.

But analysts note that Ecuador's unstable political landscape could again change by another election to select members of the assembly around September. Old foes such as former President Lucio Gutierrez could get a strong foothold.