In Sunday’s fiercely contested referendum, voters said ‘No’ to a raft of 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’s were 51 per cent of the vote, election officials said today.

Chavez, a self-styled revolutionary and ally of Cuba who is used to winning national votes easily, conceded defeat. He said, “I understand and accept that the proposal I made was quite profound and intense. I will continue in the battle to build socialism.” He also said the reforms proposals remained “alive”, suggesting he might try to push them through later.

Opposition activists were ecstatic as the results were announced shortly after midnight. Caravans of them cheered, honked horns, and waved flags out of car windows. Many said Venezuela had escaped authoritarian rule.

Students, rights and business groups, opposition parties, the Roman Catholic Church, former political allies, and even his usually loyal ex-wife had all lined up against Chavez ahead of the referendum vote. They accused him of pushing the constitutional reforms to set up a dictatorship.

However, Chavez remains in control of most Venezuelan institutions even after suffering his first ballot box loss since he swept into office in 1998.

“This is not a defeat. This is another ‘for now’,” Chavez said, repeating a famous quote when, as a red-bereted paratrooper in 1992, he acknowledged on TV he had failed to seize power in a coup attempt.

The folksy leftist leader was unusually conciliatory at his presidential palace. He told supporters not to be sad and wished all Venezuelans a merry Christmas.

“I have listened to the voice of the people and I will always be listening to it,” he said.

Nicholas Burns, US Undersecretary of State for Political Affairs, said Chavez’s defeat showed that Venezuelans wanted democracy.

“This was positive news to see this victory by the citizens of Venezuela because we felt that this referendum was a referendum to make Chavez president for life and that’s not ever a welcome development in a country that wants to be a democracy,” Burns said in Singapore, where he was attending a seminar.