To cheers and applause from a packed Congress in Caracas, President Hugo Chavez vowed to replace what he called "this dying constitution".

The former paratrooper announced a vote on his plan to create a constitutional assembly that would have the power to dissolve Congress, reorganise the judiciary and extend his presidential authority.

Saying that some reforms were too urgent to await a new constitution, he asked the congress, where his party does not have a majority, for special powers to fight poverty and restructure the country's $23bn foreign debt.

Outgoing President Rafael Caldera looks on at the swearing in

"The constitution and with it the ill-fated political system to which it gave birth 40 years ago has to die: it is going to die, sirs, accept it," he said. "There will be no backtracking in the political revolution upon which we are embarking."

Mr Chavez won a landslide victory in December after a campaigning on a platform of fighting corruption in Venezuelan politics and instituting constitutional reform.

Buoyed by his promise to redistribute the country's vast oil wealth to help the poor he polled the largest majority for any Venezuelan President in 40 years.

Two-hour address

Mr Chavez won the largest presidential majority in decades

His inauguration comes almost seven years to the day after he led thousands of rebel soldiers in a failed coup attempt - an event he made reference to in his speech describing it as "inevitable, just like the explosion of volcanos."

Representatives from more than 60 countries, including 16 heads of state and government travelled to Caracas to attend the inauguration ceremony.

BBC Central America Correspondent Peter Greste: "Hugo Chavez is hugely popular amongst the country's poor"

Thousands of Chavez supporters, many wearing his trade-mark red beret packed the streets outside the Congress building.

A self-proclaimed "soldier of the people", who has rejected both "savage" neo-liberalism and communism, Mr Chavez says he is on the same political wavelength as UK Prime Minister Tony Blair.

'Dictator-in-waiting'

Cuba's Fidel Castro joined other foreign guests for the ceremony

His political proposals have caused panic in the business community and prompted his opponents to brand him as a leftist dictator-in-waiting. But he is hugely popular among the country's poor who see him as a saviour from the corrupt traditional ruling elite.

Mr Chavez's supporters blamed the country's two main parties for squandering the world's largest oil reserves outside the Middle East and for leaving more than half the population destitute.