Hugo Chavez, the President of Venezuela has announced that he is to re-nationalise the power and telephone companies as part of his establishment of the socialist Venezuela for the 21st century.

This has upset the United States who have demanded compensation for any US companies affected. "Nationalisation has a long and inglorious history of failure around the world," said White House spokesman Tony Snow.

According to Chavez "The nation should recover its ownership of strategic sectors,".

Chavez was first elected in 1998, is remaking Venezuelan society, rewriting laws, setting up state-funded cooperatives and has started a land reform programme that has turned over large swaths of ranch lands to poor farmers.