"Venezuela said 'No' to socialism, Venezuela said 'Yes' to democracy," said Leopoldo Lopez, the popular mayor of a Caracas district.
DANGEROUS INFLUENCE
The United States says Chavez is a dangerous influence in Latin America, using Venezuela's oil wealth to win allies and undermine democracy.
Chavez often uses fiery rhetoric against Washington and his rivals at home, but he was unusually conciliatory when he conceded defeat in the early hours of Monday.
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.
The loss was a shock to the government. Three ministers had said early on that Chavez was ahead by at least six percentage points but his lead evaporated as more returns came in.
It was a major victory for Venezuela's fragmented opposition, which had failed to beat Chavez in almost yearly votes or oust him in a brief coup in 2002, a national oil strike and a recall referendum.
The victory could embolden opposition leaders to try to block Chavez's plans to install what he calls "21st century socialism", which has involved nationalizing large areas of the economy in the No. 4 oil supplier to the United States.
"This should cause him to rethink the pace and scope of the changes he is seeking to impose on Venezuela," said Vinay Jawahar, an analyst at Princeton University.
"Whether this will happen, however, is unclear. Chavez could never be accused of not having grandiose, ambitious plans and might not be willing to let reality impinge on those."
Chavez still wields enormous power and his supporters dominate Congress, the courts and election authorities.
Soldiers bark his slogan "homeland, socialism or death" when they snap their salutes. The state oil company spends more on social projects such as building homes than on exploration of some of the biggest deposits outside the Middle East.
Chavez had tried to make the referendum vote a black-and-white plebiscite on his rule and sought to rally his supporters with warnings that he was under attack from Washington and other foreign enemies.
