Chavez targets Venezuela's banks

Mr Chavez began his nationalisation drive earlier this year

Venezuelan President Hugo Chavez has threatened to take over the country's private banks and largest steelmaker.

But he said he would refrain from nationalisation if the firms began to work in the "national interest".

The banks should make domestic loans a priority while steel firm Ternium-Sidor should supply the local market with cheap products, Mr Chavez added.

The threat comes days after Venezuela took control of the last privately-run oil operations in the country.

"Private banks have to give priority to financing the industrial sectors of Venezuela at low cost," Mr Chavez said.

He added that if banks failed to agree it was better to nationalise them and get them all to "work for the development of the country and not to speculate and produce huge profits".

However, it was not clear whether the president was referring to Venezuelan banks or foreign groups with subsidiaries in the country.

Takeover drive

Mr Chavez embarked on a widespread nationalisation drive in January, after winning a landslide victory in the national elections.

As a result of the measures the country's largest telecom firm, CANTV, the electricity sector and its oil refineries are being brought under state control.

However, earlier on Thursday Mr Chavez's plans for the massive Orinoco Belt oil projects hit a hitch over compensation and shareholdings for the former foreign owners of the sites.

The Venezuelan government has now threatened to expel US firm Conoco-Phillips if it fails to accept plans to nationalise its multi-billion-dollar investments in Venezuela.

Energy minister Rafael Ramirez said Conoco had no option but to accept the terms of the nationalisation of its oilfields.

The US firm is the only one of five major international energy companies to have so far refused to accept the takeover of its operations in Venezuela.

But negotiations are continuing between the government and all five over how much compensation they will receive.

The firms hope to maintain a minority stake in the partially nationalised oilfields. Reserves there are currently valued at $30bn (£15.1bn), but many experts say they could be worth four times more.