Speaking to the National Assembly, Mr Chavez said presidential terms should be extended from six to seven years and current limits on re-election should be eliminated. But the self-styled revolutionary, who is seeking to transform Venezuelan society along socialist lines, denied accusations that he wanted lifelong power.

"I propose to the sovereign people the seven-year presidential term, the president can be re-elected immediately for a new term," Mr Chavez said. "If someone says this is a project to entrench oneself in power, no, it's only a possibility, a possibility that depends on many variables."

Critics accuse Mr Chavez of seeking to remain president for decades to come, like his close friend Fidel Castro in Cuba. Many fear he is steering this oil-rich South American nation towards Havana-style communism.

Mr Chavez also proposed ending the autonomy of Venezuela's central bank, which would give him access to billions of dollars from its reserves, as well as creating new types of co-operative property and a "popular militia" that would form part of the military. The Venezuelan president's political allies firmly control the National Assembly, which is expected to approve the reform plan within months. It would have to be approved by citizens in a national referendum.

Earlier, Mr Chavez was greeted upon his arrival at the legislature by a crowd of cheering red-clad supporters. Fireworks exploded overhead, giant video screens were set up and folk music was played.

Venezuela's Roman Catholic Bishops' Conference has complained that Mr Chavez's reform proposals were drafted without public input.

Mr Chavez denies copying Cuba and insists that personal freedoms will be respected. He and his supporters say democracy has flourished under his administration.

In Washington, Sean McCormack, a State Department spokesman, said that the US would wait for details of Mr Chavez's proposal before commenting on it. He added that Mr Chavez in the past "has taken a number of different steps... that have really eroded some of the underpinnings of democracy in Venezuela".