Venezuela's Citgo Petroleum Corp has already begun selling millions of litres of discounted fuel in Massachusetts and the Bronx in New York City as part of a plan by Hugo Chavez, the Venezuelan president, to aid poor communities that he says are neglected by Washington.

Bernardo Alvarez, Venezuela's ambassador to the US, said he would sign an agreement on Thursday in Maine to start providing heating oil to four Indian tribes - the Penobscot, Micmac, Passamaquoddy, and the Houlton Band of Maliseet Indians.

James Sappier, the Penobscot tribal chief, said his tribe was "very grateful". He said: "This is probably one of the greatest decisions for our tribe in years."

Tough times

Many in the tribe of 2261 people are facing tough times as jobs have moved out of the area, and the discounted fuel could save a family $1000 or more this winter, he said.

Heating oil prices have recently been hovering around $2.40 a gallon (63 cents a litre) in the reservation area in Maine, and Venezuela estimates participants will save 60 to 80 cents per gallon (15 to 21 cents per litre).

Alvarez, the Venezuelan ambassador, said Caracas would also extend the deal next week to Vermont and Rhode Island.

Other communities in New York City - Harlem, Queens and Brooklyn - would also benefit soon, he said.

Alvarez was accompanied by a group of US activists on a tour of a state-funded co-operative in Caracas where the poor receive free healthcare and hundreds work in textile and shoemaking shops.

The visitors included Harry Belafonte, the singer, Danny Glover, the actor, Cornel West, a Princeton University scholar, and Dolores Huerta, an advocate for farm workers.

President Chavez's opponents accuse him of using Venezuela's oil wealth to win friends while trying to embarrass George Bush, the US president whom he calls a "madman".

But Chavez's supporters defend the heating oil programme as an example of generosity by a president leading a socialist revolution for the poor.

Sappier, the Penobscot tribal chief, said snow was falling in Maine and praised Chavez for his help. "We appreciate him very much as a leader," he said. "It's been said he's one of us. His thinking is like ours."