When city residents banged pots and pans on the streets last week to support farmers whose weeks-long tax revolt has paralyzed the country's grain exports and emptied store shelves, they were met by pro-government demonstrators. In dueling protests in front of the government palace, the pro-government groups almost immediately started throwing punches.

At the heart of the fray was Luis D'Elia, a controversial protest leader and former government official. D'Elia later denied he was sent by the center-left government, saying he was moved to protest because of his visceral hatred for the oligarchy. But instead of distancing herself from D'Elia's violent behavior, Fernandez seated him behind her a night later during a speech in which she defending her higher taxes on soy exports and appealed to farmers to respect public order. "A lot of Argentines just can't digest that much contradiction," wrote Eduardo van der Kooy, a Clarin newspaper columnist.

Fernandez, Argentina's first elected woman leader, took office in December, succeeding her husband, Nestor Kirchner. The powerful speaker and senator forged her political ideals in her opposition to the military dictatorship in the 1970s. BAD COMPANY She easily won the multi-candidate presidential election in October with around 45 percent of the vote, but has drawn sharp criticism for her uncompromising style.

Fernandez risks her political future by associating with D'Elia, whose presence is reminiscent of Argentina's worst authoritarian traditions of using "shock forces" to control the opposition, leading daily newspaper La Nacion newspaper wrote in a Sunday editorial headlined "Bad Company." "How can you tell the difference between the government and D'Elia if he is in charge of keeping public order with intolerably aggressive words and acts?" wrote La Nacion columnist Joaquin Morales Sola.

The only official to mildly rebuke D'Elia was the politically insignificant vice president, Julio Cobos. The Kirchners have wide support in poor areas ringing Buenos Aires, where D'Elia came to prominence during Argentina's deep 2001-02 economic crisis as a leader of massive anti-government street demonstrations.

Nestor Kirchner took office in 2003 and consolidated power partly by forging alliances with leaders such as D'Elia, who went on to organize government-engineered marches against companies that defied state price controls. Kirchner named D'Elia deputy secretary for land reform only to fire him after he made controversial pro-Iran statements. But D'Elia still has an office in a government building, local media have reported.

Fernandez says human rights, strong institutions and social programs are her central policies, but critics say she and her husband have centered power in the presidency, weakened Congress and meddled with official economic data. On March 11, she decreed a surprise new sliding-scale tax on soy exports.

Farmers, already fed up with price controls on wheat and beef export bans, launched a nationwide protest, blocking highways to keep farm goods back from market. Farm leaders pledged on Monday to continue their strike, criticizing measures that Fernandez offered to small farmers to compensate for the higher soy tax.

Argentina exported $13.47 billion in soy last year to Europe, China and elsewhere, and Fernandez said the higher tax will help fight inflation and poverty and keep farmers from abandoning less profitable wheat, corn and beef production.

High global prices for soy should be good news for Argentina, with its vast fertile plains, but Fernandez turned a boom into a crisis by failing to build a consensus on how to distribute the grains exports windfall. The farmers' strike has become a challenge to the Kirchners' style of decreeing policies then enforcing them with threats of boycotts and retaliation against business.

In the capital, where support for the Kirchners is weak, D'Elia's role last week was to scare middle-class people who rallied in support of the farm strike.

(Editing by Kieran Murray and Patricia Zengerle)