Neil Burrows, a spokesman for BP Group, told The Scotsman last night: "The government has made a decree and told us we have 180 days to respond to its proposals. But the proposal has not been forthcoming so until we look at it in detail, we cannot comment."

He added: "We have less than 100 British workers in the country. The safety and security situation seems to be stable."

A spokeswoman for BP declined to comment on the announcement, but said the company had no British employees in the country.

In the past, YPFB produced Bolivia's natural gas, but it was reduced to an administrative role in the mid-1990s after the country's gas exploration and production business was privatised. Experts have warned that the company is incapable of becoming a producer again without a massive infusion of cash.

Mr Morales has been called "America's worst nightmare" by the US State Department because of his promises to expel foreign firms and his support for farmers of the coca plant, the raw material for cocaine.

He has repeatedly said the country's natural resources have been "looted" by foreign companies and must be nationalised so that Bolivians can benefit from the profits that are being sent overseas.

But he has also said that nationalisation will not mean a complete state takeover, because Bolivia lacks the ability to tap all its natural gas on its own.

Bolivia exports most of its natural gas to Argentina and Brazil, with whom the government is negotiating higher prices.

Last week, Mr Morales told Brazil's Valor Economico newspaper that Bolivia would have to "set up a new battalion, a new army of oil and gas specialists to exert the property right" for a complete state takeover of petroleum production.

Mr Morales also said the state would retake majority control of Bolivian hydrocarbons companies that were partially privatised in the 1990s.

Mr Morales symbolically chose yesterday, 1 May - International Workers' Day - to announce the nationalisation plan. Afterwards, a soldier unfurled a Bolivian flag from atop the natural gas installation.

It also called for respect for the interests of each party to "avoid sending a negative signal to the international investor community which is following the developments closely."

Spain would continue to work with Bolivia and the two countries would maintain "intensely close" relations, so that a solution satisfying all parties can be reached, said the statement.

Spanish-Argentine energy company Repsol-YPF is one of the largest investors in Bolivia.

According to a decree signed by Morales earlier in the day, Bolivia's state oil company YPFB will control all natural gas fields and pay foreign companies for their services.

Some operators will get about 50 percent of the value of gas they extract, but two largest gas fields insist on giving their operators only 18 percent of the revenue of gas extracted there.

Bolivia has a reserve of about 48.8 trillion cubic feet of natural gas, the second largest deposit in South America, which is being exploited by about 20 foreign firms.

Morales, who took office in January as Bolivia's first Indian president, has repeatedly said his country's natural resources must be nationalized so that Bolivians could benefit from the profits that were sent overseas.

Chirac and Bush "broadly discussed international issues of concern," spokesman Jérome Bonnafont said.

Bush, a Republican, served one term as president 1988 to 1992 before being beaten by Democrat Bill Clinton.

In his recently published memoir he described US relations with France as fundamentally strong, despite clashes between Paris and President George W. Bush's administration over the Iraq war.

In a clear rebuff to the views of its South-east Asian neighbours and Western governments, Burma's military regime is poised to deliver a lasting blow to hopes of political reform that could bring democracy to that country.

Among those being targeted is the party of pro-democracy leader Aung San Suu Kyi, the National League for Democracy (NLD). And the junta is doing so by turning to a word that has gained new meaning in the post-Sep.11, 2001 world-'terrorism'.

"The government has enough evidence to declare the NLD as an unlawful association for its links with terrorist groups," Brig. Gen. Kywa Hsan, the junta's information minister, told reporters in Burma this week.

Those words come in the wake of Rangoon naming four groups as having committed "terrorist" acts in the capital. The four, which are in exile, are the National Coalition Government for the Union of Burma (NCGUB), the Federation of Trade Union for Burma (FTUB), the All Burma Students' Democratic Front (ABSDF) and the National League for Democracy - Liberated Area (NLD-LA).

The threat by the junta, which could force the NLD to dissolve due to laws such as the Illegal Association Act, has triggered widespread concern among Burmese political exiles, since they, like the other actors in the international community, are aware of how pivotal a player the NLD is to help Burma shed its tag of being a military dictatorship and become a member of the world's democracies.

That stems from the NLD having won 392 seats of Burma's 485-member parliament at a general election in May 1990, which the junta has refused to recognise. Rangoon's generals, who were humiliated by the people's verdict on the only election in decades, cracked down on the government that emerged from it, the NCGUB, forcing it into exile.

The latest moves by the State Peace and Development Council (SPDC), as the junta is officially known, come on top of its attempts to silence Suu Kyi, a winner of the Nobel Peace Prize, by keeping her under house arrest, the current phase of which began in May 2003. She has spent the last 10 of her 17 years as a prisoner of the junta.

And a regime that has gained notoriety for terrorising its people for decades through its harsh grip on power is still to offer a plausible reason-other than accusing the NLD and other exiled groups-about who was actually behind the five bomb blasts that rocked Rangoon's business district over a week ago. The Burmese capital also witnessed three bomb blasts in May last year, which killed 20 people and injured scores, unlike the recent explosions, which left no casualties.

"We are concerned with these developments, because this is a threat by the military regime to do something severe against the NLD, to dissolve it," Zaw Min, head of the foreign affairs committee of the Democratic Party for a New Society, a Burmese political group in exile, told IPS.

"They are shutting the door to political reform. The SPDC clearly does not want any reconciliation," added Zin Linn, a spokesman for the NCGUB, during an interview.

The political reform process in Burma has followed two tracks, both of which have ended in futility. One got underway in October 2000 when the United Nations appointed a former Malaysian diplomat, Razali Ismail, to be a special envoy to broker talks between the SPDC and the NLD leadership, aimed to move the country down the road towards a democracy. But the SPDC banned Razali from entering the country in March 2004, forcing him to quit his assignment months later.

The other was the junta's effort to draft a new constitution for the country as part of a seven-point road map to establish a democracy. But the NLD led opposition groups in a boycott of this constitutional drafting exercise, given the restrictive measures imposed on this political exercise-including a threat of being thrown into jail for those who opposed the SPDC's idea of governance and power sharing.

In March, the junta revealed its lack of interest in reform by booting out a Swiss conflict-resolution group that had played a major role in trying to bridge the political divide in the country. The same month, it rebuffed attempts by Malaysian Foreign Minister, Syed Hamid Albar, to meet Suu Kyi as part of his effort to assess the prospects for democracy in Burma.

The Malaysian minister's visit was the latest effort by the 10-member Association of South-east Asian Nations (ASEAN), of which Burma is a member, to understand a regime that ASEAN has defended in the face of mounting criticism for its growing list of human rights violations. The abuses have included the use of rape as a weapon of war against women from the country's ethnic minorities, imprisoning over 1,300 political prisoners, forced labour that borders on slavery and having tens of thousands of child soldiers in its ranks.

The members of ASEAN-which include Brunei, Cambodia, Indonesia, Laos, the Philippines, Malaysia, Singapore, Thailand and Vietnam-have come to Burma's defence, disagreeing with the United States and the European Union, which have led the way in calling for and imposing economic sanctions and travel restrictions on Burma and its leaders.

"The timing and the motive of the SPDC's plans is revealing," Aung Naing Oo, a Burma analyst living in exile, told IPS. "The SPDC now realises that the geo-political conditions favour it enormously, since they know that ASEAN has no clout and international pressure from the U.S. will not be much stronger."

"The military regime feels that nobody can touch them now and they are forging new links with China, Russia and India," he added. "They want to effectively remove the only embarrassment and threat to their rule, the NLD."