"We don't want to damage [relations] but at this moment I am putting political, diplomatic and economic relations under a thorough revision," Chavez said on Wednesday.

Chavez's tough words came after a heated exchange over the weekend at the close of the Ibero-American Summit in which Chavez called Spain's former prime minister a "fascist" after which King Juan Carlos angrily told him to "just shut up."

Chavez branded Jose Maria Aznar a "fascist" for allegedly having backed a 2002 coup attempt against him.

Meanwhile Chavez said Jose Luis Rodriguez Zapatero, Spain's current prime minister, was "not coherent" in recent remarks, referring to Zapatero's request for good sense to calm relations.

"He speaks of good sense," Chavez said, but when Zapatero "takes up the defence against a fascist and the abuse of truth, and a king who tramples or tries to trample the dignity of a people, it is difficult to have good relations."

Several large Spanish companies have investments in Venezuela, including Telefonica, a telecommunications group, and the Spanish-Argentinian oil group, Repsol YPF.