ON the front line of a new cold war between North and South America, Maria Velazquez Hernandez has already chosen sides. She returned home to Nicaragua last week after an all-expenses paid visit to Venezuela for a cataract operation that vastly improved her sight.

“It was like a miracle from God,” Velazquez declared. “And I want to thank President Hugo Chavez.” Venezuela’s swashbuckling would-be revolutionary leader had scored yet another propaganda victory in his venomous battle with Washington for influence and economic advantage across the Latin American continent.

Velazquez was one of 85 Nicaraguans flown to Caracas for operations funded by Chavez, who will bring his volatile mix of neo-Marxist zeal and charitable largesse to London next week. The 51-year-old former paratrooper will meet Ken Livingstone and other prominent leftwingers who share his contempt for the White House of President George W Bush.

After five years of trying to isolate the belligerent strongman and silence his anti- American insults, Washington’s policy of quietly wooing the Latin neighbours of the president who once called Bush an “asshole” was in tatters last week.

It was a measure of Chavez’s rapidly expanding clout in the region that even a country as poor and widely ignored as Bolivia can send shockwaves around the western world. Evo Morales, its populist new president, announced that he was following Venezuela’s example and nationalising energy resources, despite efforts by Condoleezza Rice, the US secretary of state, to prevent political shocks that might increase American petrol prices.

Officials in Washington wanly acknowledged that US influence in South America was at a dangerously low ebb, with allies of Chavez jockeying for power in elections in Peru, Nicaragua and Mexico.

The stage has been set for a protracted standoff between western consumers worried about rising prices and South American oil producers whose newfound enthusiasm for bashing foreign companies may spread to Africa, Asia and elsewhere.

“Ten years ago (Bolivia) wouldn’t have created a ripple because there was enough world supply,” said Phil Flynn, a Chicago-based analyst. “But now we’re in a seller’s market. What we’re seeing now is any nation with any supply trying to cash in. Power has gone to the heads of these countries. It’s a very dangerous trend.”

As the man in charge of the western hemisphere’s largest oil reserves, Chavez has been making the most of soaring revenues. Indeed his electoral position at home, where his spending on the poor has all but guaranteed him re-election, is so strong that yesterday he announced he would seek “indefinite” re-election, beyond the constitutional limit of 2014, if the right-wing opposition boycotts the December poll.

The oil wealth has also enabled him to advance his nationalist agenda to other Latin American countries he considers unacceptably subservient to what he calls Bush’s “imperialist” designs.

To Washington’s chagrin, Chavez is stitching together a cross-continental anti-American alliance he calls an “axis of good”, but which US officials see as a rogues’ gallery of failed dictators, corrupt opportunists and potentially sinister presidential wannabes.

The godfather of the movement is President Fidel Castro of Cuba, who after years of geopolitical irrelevance has suddenly found himself back in business as a thorn in America’s side.

Yet it is Nicaragua that has become the most intriguing proxy for the battle over Latin hearts and minds. Having spent millions of dollars under President Ronald Reagan to oust the left-wing Sandinista regime, Washington is now facing the prospect of a democratic comeback by Daniel Ortega, the former Sandinista leader again running for president — this time with the help of Chavez.

Washington is backing Eduardo Montealegre, a former foreign minister who has accused Chavez of trying to “buy” the November election for Ortega by offering cheap oil to municipalities largely controlled by Sandinista mayors. Ortega retorted that Montealegre was a puppet of Paul Trivelli, the US ambassador in Managua.

Chavez has made no secret of his interest in the Nicaraguan poll. He has promised more trips to Caracas for Nicaraguan patients needing medical attention. Castro has offered to send Cuban doctors to help.

Accusations of interference have also been flying in Peru, where Chavez’s antics provoked a mutual withdrawal of ambassadors and a storm of invective. Peruvian elections rarely excite much attention in Washington but analysts watched bleakly as Chavez waded into the fray. He is backing Ollanta Humala, a former military hardliner who favours nationalisation of energy reserves. Humala faces an election run-off on June 4 against Alan Garcia, described by The New York Times as “a spectacularly irresponsible and corrupt president in the late 1980s”, but who is 12 points ahead in the polls. When Chavez called Garcia a “thief”, Garcia retorted that Chavez was suffering from “perhaps an excess of alcohol”.

Potentially most worrying for Washington is a presidential election in Mexico, where Andres Manuel Lopez Obrador, a populist former mayor of Mexico City, has been fighting accusations that he is a Mexican version of Chavez. A hero to Mexico’s poor, Lopez Obrador is wary of alienating conservative voters and has been keeping his distance from Chavez, who labelled Vicente Fox, the outgoing president, a “puppy” of the United States.

US analysts predict a possible backlash against Chavez’s behaviour. He is unpopular in Brazil and Argentina, which consume Bolivia’s natural gas output and will bear the brunt of the nationalisation policies.

Yet Chavez has never shrunk from making enemies and Washington’s efforts to curb him have failed miserably. “I sting those who rattle me,” Chavez warned the US secretary of state recently. “So don’t mess with me, Condoleezza.”

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