12:05pm UK, Tuesday May 02, 2006

Bolivia's President has ordered soldiers to seize control of the country's natural gas fields.

Newly-elected Evo Morales threatened to expel foreign companies that do not recognise the resource had been nationalised.

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Mr Morales has vowed more state control over resources

Bolivia has the second-largest gas reserves in South America, after Venezuela.

But disputes over how the impoverished nation should manage those riches have sparked several revolts since 2003.

Mr Morales became president in January on vows to exert more state control over natural resources, reflecting a backlash against foreign investment in Latin America.

The President said companies, including BP and British Gas, will have to sign contracts acknowledging state controlor leave.

He said: "This is just the start ... tomorrow or the day after it will be mining, then the forestry sector, and eventually all the natural resources for which our ancestors fought."

Mr Morales then ordered soldiers and "battalions of engineers" to occupy energy fields.

But the government guaranteed production and exports.

Mr Morales added: "The looting by the foreign companies has ended."

But Brazil, Bolivia's biggest gas customer, and Spain have expressed "deep concern" at the move.

It echoes Venezuela's forced tax hikes on its oil supplies.