Peru's government has recalled its ambassador from Venezuela and accused President Hugo Chavez of 'meddling in its affairs' after he praised a former-army nationalist candidate running for president in Peru's April elections.
Peru is asking its ambassador in Venezuela how Peruvian presidential candidate, Ollanta Humala, was invited to a ceremony in which Chavez praised him for his platform that seeks to reverse 15 years of pro-market policies.
"There are concerns of political meddling in Peru's electoral affairs and comments by President Chavez were out of place," a spokeswoman said. But ambassador Carlos Urrutia's recall would not be permanent, she added.
Chavez said Humala's plans for a "Second Republic" - in which Humala says he would he renegotiate contracts with foreign companies to benefit Peru's poor - would be a "second independence" for the Andean nation.
He said Peru would be part of a "battle that joins together nationalism" in Latin America. His comments, made during a ceremony with visiting Bolivian President-elect Evo Morales , were broadcast from Caracas on Peruvian television on Tuesday.
Morales also offered Humala his support.
Humala, who is leading in some polls before April's vote, told a news conference on Thursday that the meeting with Chavez was his first and he planned more trips to Venezuela.
"Next month I'll be going again to Venezuela to participate in an international forum and there's nothing wrong with that. What is wrong with meeting Hugo Chavez? He is the leader of a nation, not a criminal," Humala said.
Humala's gradual rise in the polls to rival leading candidate Lourdes Flores of the centre-right has frightened investors and Peru's political elite.
In late December, the Lima stock index registered its biggest one-day fall since 2000 because of Humala's increasing popularity and some international investors have pulled out of Peru's sol currency and its bonds.
Mr Humala said his policies would not be a repeat of Peru's military government of the 1970s, which confiscated land from wealthy farmers and nationalized foreign companies.
Political analysts and pollsters say Humala is winning support among Peru's rural poor who are disillusioned with traditional politics and have seen few benefits from the free-market economic policies of President Alejandro Toledo.