Hugo Chávez, Venezuela's socialist president, remembers "with great affection" the day he went to see Queen Elizabeth II in 2001. "There's something I'll never forget. When I got out of the car at the entrance to the palace, I spotted a coin lying on the ground and picked it up, and saw it had her face on one side. So I took the coin," he says. Once inside, he presented the Queen with his official gift, a glass model of waterfalls and forests in Venezuela and a multi-coloured bird. Then he took out the coin and handed it to her. "She kept it," he laughs, as he recounts the story in an interview with the Guardian yesterday, sitting beneath a portrait of 19th-century South American would-be liberator, Simón Bolívar - he ordered his staff to put up the picture - in his suite at London's Savoy hotel.
Chávez is in Britain at the invitation of London mayor Ken Livingstone and has been greeted rapturously by his supporters - from the Latin American diaspora to the British left, excited about a 21st-century success story. But his reception in most of the media here has been hostile, from wild accusations that he supports terrorism to suggestions that he is a despot who has done nothing to reduce poverty in spite of his claims.
We meet Chávez on day two of his whistlestop visit. He is of mixed race, thick-set, neatly turned out in suit and tie and with a fierce handshake. He touches your arm and knee as he speaks. On stage, Chávez is entertaining, like a stand-up comedian, and very physical: he mimes the way people cringe away from him in horror when they first meet this terrifying dictator. But in person he is thoughtful and concentrates carefully on the details. On this visit he failed to drop in on his old friend the Queen. "But I'd like to take the opportunity through your paper to greet her and congratulate her on her 80th birthday." Referring to his great ally, Cuba's president, Fidel Castro, he says: "She and Fidel are more or less the same age." The Queen and Castro have never met, so would he be the intermediary who could bring them together? "The two boys and the girl," he grins. "She is so young. I saw her on TV and she looks so fresh."
If it is something of a surprise to hear Chávez, a self-confessed socialist revolutionary and former army officer from a poor family, talking with such affection about Britain's hereditary head of state, it is rather less of a shock to hear his views on the Bush administration. In his seven years in power, the man who has twice been elected president has become one of the most popular leaders in Latin America precisely because of his outspoken criticism of what he always calls "the empire". His unabashed opposition to US foreign policy, and the pressure it has produced from Washington, tap into the deep vein of suspicion and resentment that two centuries of US invasions, coups, and economic domination have aroused in Latin America and the Caribbean.
Four years ago, Chávez himself survived a coup by dissident generals, backed by opposition media tycoons and many in Venezuela's upper class. US officials knew of the plot in advance and Washington welcomed his arrest and apparent overthrow. But the mutiny collapsed two days later when hundreds of thousands streamed out of the poor areas of Caracas, calling for his release in a huge display of "people power". And it is no surprise that he is popular with the poor: using Venezuela's oil revenues - the country has the world's sixth largest oil reserves - Chávez has funded extensive anti-poverty programmes in his own country, a literacy drive, health clinics in slum districts, aid to single mothers, free treatment to HIV/Aids sufferers, special tuition for early school-leavers, and evening classes for adults.
Last year, he even started offering this largesse to poor communities abroad. Through Citgo, the chain of petrol pumps that Venezuela owns in the United States, he cocked a snook at Washington by linking up with community leaders in several American cities and supplying cheap heating oil. At meetings yesterday with British trade union leaders and London's mayor, he was exploring options for doing the same in poor communities in Britain.
"We are very much encouraged by the success this has had with poor families in the US," he says. "We think it is important to be consistent with what you say and what you do, given the increase in world poverty as a result of the savagery of capitalism around the world and the high price of oil and fuel. In Britain we have investments in two small refineries and we have offices all around Europe. Our deputy minister for foreign affairs was expelled from the US just because she was encouraging this programme in the US."
But it is in South America where Chávez has most support. His hero is the great - if ultimately unsuccessful - Latin American, Simón Bolívar: Chávez wants to realise the Bolivarian dream of continental integration and independence. He has already had his country renamed the Bolivarian Republic of Venezuela, a decision ratified by the electorate in a referendum.
But Venezuela is unique in Latin America in being blessed with such vast amounts of oil. Even sympathetic analysts of Chávez's pro-poor policies wonder whether they really amount to a model for the rest of the continent. Surely Venezuela is an exception, with no direct lessons to offer its regional neighbours?
Chávez takes issue with that. Countries with natural resources have to take control of them, he says; narrow ruling elites and foreign investors have exploited them for too long, making super-profits for themselves. The Venezuelan governments which were in charge during the last era of high world oil prices in the 1970s wasted much of the revenue on patronage, corruption, macro-economic mismanagement and boom-bust spending. Washington's hostility to Chávez began when Venezuela's president sought to take control of his country's oil industry and stopped it being privatised. He thoroughly applauds Bolivia's new president Evo Morales for nationalising Bolivia's gas fields.
This week, Chávez has been presented in much of the British media as if he were some kind of dictator, and unelected. But as he points out, he has held and won eight elections, all certified by outside observers as free and fair. In contrast to countries such as Italy, where Silvio Berlusconi controlled the major TV channels, the opposition in Venezuela has three TV stations that criticise Chávez constantly and furiously. "It's the first time that a government, after seven and a half years of power, has a popularity rating of close to 70%," he says.
Some supporters suggest that the Venezuelan president's government is classic top-down paternalism, heavily dependent on the energy, charm and goodwill of the president himself. Chávez denies this. "Our participatory democracy is getting more solid every day," he says. "We have urban land committees, health committees, environmental committees, groups running savings banks, as well as elected local councils. Never in our history has Venezuela had such autonomous powers as we have today. It is different from the former neo-liberal model."
The United States is as concerned by this as much as by Venezuela's economic policies. "The empire is very preoccupied and the pawns of the the empire are very preoccupied that this model is so strong and enjoys so much support, with a reduction in poverty [and] the inclusion of people in education; illiteracy has been wiped out and we are now building a health care system that is open to all. You have to remember that in 1996 inflation was 100%. Now unemployment is in single digits, after reaching nearly 20%," he says. It is because Venezuela is implementing an alternative which is successful, he adds, that "they are orchestrating these attacks. Washington has said that I am a modern-day Hitler. Last week, a spokesman in the White House referring to the latest report in the war on terrorism said that Venezuela is supporting terrorism." He sees the allegations of terrorism as bewildering, part of the US smear campaign against him.
The charge that Chávez has allowed inequalities to widen seems particularly far off target. There are no independent statistics to back up Chávez's claim that the percentage of people below the poverty line has dropped from 50% to 37%, but the wave of social spending in poor areas suggests he must be right about the broad trend. Britain's Department for International Development has declined to fund several attempts by independent British social scientists to research Venezuela's poverty reduction schemes; it has left it to the Inter-American Development Bank, an agency still dominated by the neo-liberal Washington consensus.
But Venezuela has pioneered the effort to implement an alternative economic and social model that rejects the US belief in privatisation, cuts in government welfare spending and free trade. A decade of economic disaster throughout Latin America in the 1990s has given him huge support in the region, inspiring other leaders to try to follow suit.
Beyond Latin America, Chávez has forged good working relations with the world's major oil and gas exporters. After London, he leaves for Algeria and Libya. Some critics have accused him of cosying up to the military regime in Burma. "That is the first time I have heard about Burma - they say I support Bin Laden or ETA, but never Burma. But ... if you say so. Many things are said about me, so many things both inside and outside the country. This is a well-orchestrated, worldwide campaign. Now what is the purpose of this campaign? Simón Rodriguez, Bolívar's tutor, used to say 200 years ago - the idea is to destroy the model and by doing so you prevent it from becoming contagious."
At an enthusiastic rally in London's Camden Centre on Sunday afternoon, Chávez delighted the crowd during his marathon three-and-a-half-hour speech by taking the same metaphor further. A few years ago, few people dared to call themselves socialists, he says. Now it is different. "We have to marshal our ideas for a better world. We have to infect people. Let's have a badge, saying, 'I'm a socialist. I will infect you'."
Chávez's critics have also made their voices heard. An anti-Chávez website, www.vcrisis.com, has also been running lengthy attacks on the visit, accusing him of human rights abuses, of locking up political opponents, and making a weapon out of la lista (the list) of the several million people who signed petitions calling for a referendum to recall him from power in 2004. They claim signatories suffer discrimination now. There has also been some dissent from people who support what he is trying to achieve. Nicaragua-born Bianca Jagger, for instance, criticised Chávez for supporting the Sandinista leader, Daniel Ortega, even though Ortega has made what she sees as an unholy alliance with the rightwing in his country in this autumn's elections.
Amnesty International and Human Rights Watch publish allegations against the Venezuelan government on their websites. HRW's director general José Miguel Vivanco criticised the media laws introduced last year as having "flouted international principles that protect free expression". The two organisations have also accused the government of attempting to muzzle criticism by threatening opponents with prosecution. Amnesty highlights alleged brutality by the security forces over decades, which Chávez has not ended. But neither organisation singles Venezuela out as having a particularly bad record globally.
But back to Britain: why did he really not meet up with Tony Blair? Was it because the British government's relations with Chávez took a nose-dive after the failed coup attempt when London reacted in solidarity with the Bush administration, according to British academics who specialise in Latin American politics? Or was it it also because of Blair's attack on Chávez in parliament in February? Chávez denies any snub. Referring to his calls on the Queen and Blair last time, he says, "The big capitalist press is trying to minimise the importance of this visit. I didn't come here to visit them. There's nothing negative. This is not an official visit." And anyway, there were few heads of state in the world he could ask to see at such short notice - he had only a fortnight to arrange the trip. What about Castro? "I was coming back from Africa in my Airbus once. I rang him [Fidel] and said I'd be in Havana in four hours' time. He said, 'Where are you?' I explained I was in the air. 'Only you and Bush would ring people from their planes!' he told me. I was quite offended."
Just before we leave he tells us, "I have an obsession with reading." Asked what is on his bedside table at the moment, an aide goes out and returns with Les Misérables by Victor Hugo. "I read it all the time. It is my companion. It is a monument to human beings," says Chávez.
And a final word? "As Rousseau said, between the poor and the rich, liberty is oppressive," he says. "Only law can liberate".