Interim leader Pedro Carmona, a businessman who had led protests against Chavez, made the announcement from military headquarters in Caracas, the South American nation's capital.

But it was unclear how strong his day-old grip on power was after pro-Chavez troops took over the palace and tens of thousands of supporters of the fiery left-wing former president surrounded the largely empty building.

The military has held Chavez incommunicado since top generals ousted him on Friday and installed Carmona.

A Reuters reporter inside the palace said troops were holding prisoner one minister of the interim administration, which came to power after generals forced the populist Chavez to resign in the world's fourth largest oil exporting nation.

Despite facing massive protests against his autocratic style of leadership from a surging opposition, Chavez had a popularity rating of about 30 per cent and remained popular among Venezuela's poor majority before his ouster.

Police yesterday fired warning shots, water cannon and tear gas to disperse groups of pro-Chavez protesters on the streets of Caracas. Police also reported outbreaks of looting.

Soldiers at the palace expressed support for the pro-Chavez demonstrators, waving their rifles and berets.

A major said they wanted Chavez back and that other military units around Venezuela, including a paratroop unit in Maracay west of Caracas, were staging a rebellion against the interim government.

This could not be immediately confirmed and both Carmona and the current head of Venezuela's armed forces said the situation in the country was under control.

``The physical well-being of ex-President Hugo Chavez Frias has been totally preserved and taken care of. He was in the custody of the armed forces, not under arrest, but in the next few hours he will leave the country in accordance with his wishes,'' Carmona told CNN in Spanish.

The burly Chavez, a former paratrooper who first came to prominence as a young officer when he tried to overthrow the government in 1992, has not publicly confirmed any deal with the new authorities.

Carmona also said he was reversing an earlier interim government decision to dissolve the country's national assembly and that the legislature would be restored. He repeated a pledge to hold presidential elections within a year.

The interim president spoke just minutes after armed forces chief Gen. Efrain Vasquez said he would only support Carmona's interim government if it reversed its position and restored Congress and other public powers including the Supreme Court.

``We demand respect for the constitution, because our action (regarding Chavez' resignation), was not a coup,'' Vasquez said.

ESCAPE IN PALACE TUNNEL
The pro-Chavez protests erupted a day after the armed forces said the democratically-elected Chavez had resigned at their request after gunmen killed at least 11 unarmed demonstrators participating in a massive anti-government protest in Caracas on Thursday.

Opposition to the combative Chavez, who was voted into power in 1998, had steadily built up as his critics accused him of steering Latin America's fourth largest economy toward a Cuban-style authoritarian regime.

In scenes of confusion at the presidential palace, officials of the transition government escaped in a tunnel, while several thousand protesters chanting ``Chavez, Chavez'' demonstrated outside, waving colour posters of their hero.

A Reuters reporter said soldiers loyal to Chavez inside the palace were holding Jesus Briceno, Secretariat Minister of the interim government.

Six ex-ministers of the Chavez government joined the protesters, saying they did not recognise Carmona's government.

``We understand that the usurper Carmona has abandoned the palace,'' ex-Environment Minister Ana Elisa Osorio said.

Earlier, Briceno told reporters Chavez resigned ``verbally.''

``He resigned and we have the tape of when he resigned, what we don't have is the resignation in writing,'' he added.

`IT WAS A COUP'
Chavez supporters denounced his removal as a coup.

``We say this is a coup d'etat and that it is a lie that Chavez has resigned,'' said Willian Lara, who had been president of the National Assembly, talking to Reuters by telephone from a hiding place earlier yesterday.

The new government did not say where Chavez would go, but the armed forces generals who backed the coup said he had previously asked to be allowed to travel to Cuba, where he has a close relationship with President Fidel Castro.

While large parts of Caracas appeared to be quiet, in the downtown centre and sprawling slums, traditional strongholds of support for Chavez, many people were seething over his ouster.

``Venezuela is going to rise up, we are not going to allow this,'' said Vidal Villagas, 35, in a dirt-poor neighbourhood.

The interim government had on Friday accused Chavez of multiple violations of the constitution and said he was responsible for the protesters' deaths.

While the United States blamed Chavez for creating the conditions that led to his ouster, Latin American leaders condemned the military removal of the former president.