UPDATE 2-Venezuela election race starts, sources say Capriles to run
* New presidential election set for April 14
* Acting president Maduro hopes to succeed Chavez
* Opposition's Capriles to challenge - sources
(Updates with sources say Capriles to run) CARACAS, March 10 (Reuters) - Venezuela's opposition leader Henrique Capriles will challenge the late Hugo Chavez's preferred successor for the presidency of the South American OPEC nation next month, sources said on Sunday. Capriles will face acting president and election favorite Nicolas Maduro, and the pair have until Monday to register their candidacies for the April 14 vote. The election determine whether Chavez's self-styled nationalist-socialist revolution will live on in a nation that has the world's largest proven oil reserves. Capriles, 40, a centrist state governor, will formally announce his decision to run later on Sunday, two sources in his camp said. "There's a lot of negativity around. It's going to be tough, but we're going to do it," one of the sources told Reuters. "Henrique's made his decision. He's not backing down." Former vice president Maduro, 50, a hulking one-time bus driver and union leader turned politician who echoes Chavez's anti-imperialist rhetoric, is seen winning the election comfortably, according to two recent polls. Maduro pushed a snap election to cash in on a wave of empathy triggered by Chavez's death on Tuesday at age 58 after a two-year battle with cancer. He was sworn in as acting president on Friday to the fury of Capriles.
Capriles, the boyish Miranda state governor who often wears a baseball cap and tennis shoes, lost to Chavez in October. But he won 44 percent of the vote - the strongest showing ever by the opposition against Chavez. Capriles has accused the government and Supreme Court of fraud for letting Maduro campaign without stepping down. Although the ruling Socialist Party is favored to win, opposition supporters are trying to raise their spirits for a month of campaigning. "There's no reason to think that the opposition is condemned to defeat," Teodoro Petkoff, an anti-government newspaper editor, said on his Sunday morning talk show. Maduro has vowed to carry on where Chavez left off. His first official meeting on Saturday was with officials from China, who Chavez courted to provide an alternative to investment that traditionally came from the United States. He has adopted his mentor's touch for the theatrical, accusing imperialists, often a Chavez euphemism for the United States, of killing the charismatic but divisive leader by infecting him with cancer.
DEEP DIVIDE Chavez was immensely popular among Venezuela's poor for funneling vast oil wealth into social programs and handouts. Throngs continued to flock to pay their last respects to Chavez as his remains as they lay in state on Sunday, and emotional tributes were paid at Sunday's religious service at the military academy housing the casket. Chavez also railed against the wealthy and scared investors with nationalizations and in heavily polarized Venezuela some in the well-to-do class toasted his death with champagne. Venezuela's opposition coalition backed Capriles as its candidate on Saturday. Capriles says, if elected, he would copy Brazil's "modern left" model of economic and social policies. With candidates assigned a campaigning window of just 10 days, and at an immediate disadvantage given the state resources at Maduro's disposal, Capriles faces an uphill battle. Some argue he has nothing to gain in running, but could also commit political suicide if he opts to sit out the race and effectively hand the presidency, and a raft of economic problems like sky-high inflation and a devalued currency, to Maduro. "If the opposition runs, they'll lose. If they don't run, they lose even more!" tweeted Andres Izarra, who served as information minister under Chavez. The opposition rank-and-file is already heavily demoralized after losing last year's presidential race and taking a hammering in gubernatorial elections in December, stoking internal party divisions. "There's no doubt that it's an uphill race for Capriles," said local political analyst Luis Vicente Leon. "Maduro is not Chavez. ... (But) the trouble is that given the race is so close to Chavez's death, emotions get inflamed and the candidate probably continues to be Chavez rather than Maduro. "The big challenge for Capriles is not to campaign against Chavez but to try to take the fight to Maduro ... trying to show the huge gap (with Chavez) and relate it to the daily problems Venezuelans face." With Chavez still looming large as his remains lie in state, already visited by several million people, that will be tough. As with communist leaders Lenin, Stalin and Mao, Chavez's corpse is to be embalmed and put on display "for eternity." "He liberated us from transnational companies and stood up to imperialist countries," Jose Vielma Mora, the governor of Tachira state, told Reuters. "We will be with Chavez forever."
(With reporting by Simon Gardner, Terry Wade, Pablo Garibian, Deisy Buitrago, Mario Naranjo and Enrique Andres Pretel)