(Adds Argentine minister's comments)
BRASILIA, Aug 3 (Reuters) - South American trade bloc Mercosur will trigger its democratic clause this weekend to suspend Venezuela indefinitely and not allow it back until democracy is restored, a Brazilian government source said on Thursday.
The decision will be taken at a meeting of the foreign ministers of Argentina, Paraguay, Uruguay and Brazil in Sao Paulo on Saturday, said the official with knowledge of the negotiations.
Mercosur suspended Venezuela temporarily from the bloc in December for not complying with the bloc's regulations, but the deterioration of the political and human rights situation has led it to take a more definitive stance.
The bloc had planned to decide on applying the democratic clause at year-end, but brought the decision forward following Venezuela's controversial election of a constituent assembly on Sunday followed by the arrest of several opposition leaders by President Nicolas Maduro's government.
"The Venezuelan situation has become intolerable," Argentine Foreign Minister Jorge Faurie told reporters in Montevideo. "For Argentina, it is clear that we have reached a breaking point."
Argentina warned in July that Mercosur would permanently expel Venezuela if Maduro went ahead with the creation of a national assembly. Countries around the world have condemned the vote, calling it a bid to indefinitely extend Maduro's rule. His government has been accused of inflating turnout numbers.
Millions in Venezuela are suffering food shortages, soaring inflation and months of anti-government unrest, making it more unlikely that such a high turnout was obtained by the government.
More than 120 people have been killed in the protests, drawing international condemnation of the security forces' heavy-handed tactics.
Mercosur has no provision for expulsion, but activating the democratic clause adds to the international isolation of the Maduro government because Venezuela can only be readmitted after holding elections that the bloc members view to be democratic. (Reporting by Lisandra Paraguassú, additional reporting by Malena Castaldi in Montevideo; Writing by Anthony Boadle; Editing by David Gregorio and Sandra Maler)