The meeting with Mr Chvez, whose renegotiation of oil contracts and abrupt revocation of the licence of a private television station is part of his vision of a 21st-century socialism in his oil-rich country, is said to have followed a telephone call from Argentina's President Nstor Kirchner.

Although Mr Kirchner is not a political protg of Mr Chvez in the mould of the presidents of Bolivia and Ecuador, he is one of his closest allies in the region. The two recently sealed a joint oil exploration deal in Venezuela. In March, Mr Kirchner allowed Mr Chvez to use Argentina for a rally attacking US president George W. Bush, who was visiting neighbouring Uruguay.

Mr Kirchner has stepped in before to defend the company's interests in Venezuela, where a Techint subsidiary has a 60 per cent stake in Sidor. The Venezuelan government has 10 per cent; the rest is owned by current and ex-employees.

But the timing of this latest intervention is more unusual: it is widely believed Mr Kirchner and Paolo Rocca, the Techint chairman, have fallen out amid a snowballing bribery scandal relating to a gas pipeline contractin which Techint has been implicated.

That affair, in which the Swedish construction firm Skanska has been accused of paying kickbacks, escalated last week when a government gas regulator took out a full-page advertisement in newspapers implicating Techint in the case. Skanska has admitted to making some "undue payments" and the matter is being investigated by the judiciary.

Mr Kirchner, who faces presidential elections in October, has sought to brush off the Skanska affair as a case of corruption between private companies, and the government has denied any involvement.

But cabinet chief Alberto Fernandez held two meetings with a senior Techint official last week at which some speculated the government had unsuccessfully pushed the company to take the blame publicly – making the timing of Mr Kirchner's intervention on its behalf in Venezuela surprising. "I think you have to separate the domestic side of things from the international," said Carlos Germano, a political analyst. "Kirchner's position [on Sidor] is in defence of national companies. I don't think for an internal conflict he would change the rules of the game internationally."

Some commentators believe Mr Chavez's nationalisation threat will be quickly buried and Mr Rocca will agree to sell steel in Venezuela at below international prices in exchange for keeping control of the company.