U.S. hails Chavez loss in "president-for-life" vote

WASHINGTON (Reuters) - The United States on Monday hailed Venezuelan President Hugo Chavez's defeat in a referendum that would have expanded his powers as a message that Venezuelans do not want "any further erosion in their democracy."

The Bush administration was clearly pleased with the outcome of Sunday's ballot in which voters rejected a bid by Chavez, a virulent critic of Washington and close ally of Cuba, to be allowed to stand indefinitely for re-election.

But U.S. officials tempered their reaction apparently to avoid giving Chavez, a self-styled socialist revolutionary who wants to rule for life, an opening to accuse Washington of interfering in Venezuela's internal affairs.

Bush spokeswoman Dana Perino told reporters that Chavez's defeat "bodes well ... for freedom and liberty."

"It looks like the people spoke their minds," she said. "It was a close vote ... that's despite the opposition not being able to get out on TV and make its point."

In a fiercely contested referendum, voters said "No" to reforms that would have scrapped term limits on Chavez's rule, boosted his powers to expropriate private property and allowed him to censor the media in emergencies. The "No" camp won 51 percent of the vote while Chavez's camp took 49 percent.

Chavez remains popular and in control of most of the country's institutions. But it was his first ballot box loss since he swept into office in 1998 in Venezuela, the No. 4 oil supplier to the United States.

U.S. State Department spokesman Sean McCormack said the referendum results "demonstrate the resiliency of the idea that people want to be able to control their own destinies."

Asked whether the United States was concerned that Chavez might try other means to tighten his grip on power, he said, "I can't predict what ... course he might try to follow. Clearly this is a message from the Venezuelan people that they do not want any further erosion in their democracy and in their democratic institutions."

Chavez's opponents had accused him of pushing the package of constitutional reforms to set up a dictatorship.

The United States considers Chavez a dangerous influence in Latin America and has accused him of using Venezuela's oil wealth to win allies and undermine democracy.

A fiery speaker, Chavez called Bush "the devil" in a U.N. speech last year, has disdained capitalism as "evil" and branded his Venezuelan critics as traitors.

Admired as a champion of the poor in city slums and rural villages, the 53-year-old Chavez has said he wants to rule until he dies. But, without a constitutional reform, he will have to step down in 2013.

(Additional reporting by Arshad Mohammed, editing by Philip Barbara)