Caracas.– Venezuelan President Hugo Chavez has called for the country's largest steel firm, majority owned by Argentina, to be expropriated.

Chavez has ordered the formation of a commission to take control of Ternium-Sidor, in which Argentina's Techint has a 60 percent stake, even as negotiations over compensation to the Argentine consortium continue.

This decree-law names a commission to take control of the company and put it at the service of the nation, the Republic and its workers," Chavez said in a speech late Wednesday in honor of May Day.

Venezuela's National Assembly on Tuesday declared the steel-maker useful to the nation, a prerequisite for expropriation under Venezuelan law.

However, negotiations between Venezuela's government and the Argentine consortium over a price to be paid for its shares are still under way, a source at Techint told the press.

"Negotiations are ongoing to set conditions for acquisition of the plant. The statement of public usefulness was made in parallel, but the negotiations are ongoing," the source said.

Chavez threatened to expropriate the steel maker if a deal was not reached promptly. He said Techint was demanding three to four billion dollars in compensation, while the Venezuelan government was offering 800 million dollars.

Venezuela's Vice President Ramon Carrizales had announced on April 9 that the country would nationalize Ternium-Sidor, after talks on a union contract broke down.

After 15 months of negotiations failed to bear fruit, Chavez asked Carrizales to meet with Ternium-Sidor management concerning a contract for almost 12,000 workers.

After the meeting Carrizales announced the steel concern would be put into state hands. "Sidor is going to be nationalized. (Carrizales) tried to get the company to understand the workers' concerns but it did not accept, and in the end, the nationalization was announced," Jose Rodriguez, president of the steelworkers union, explained by phone.