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UPDATE 4-Venezuela vote dispute risks rekindling unrest, sanctions

(Adds Bolivar state, France reaction)

CARACAS, Oct 16 (Reuters) - Venezuela's opposition refused on Monday to recognize a surprise win for the ruling socialists in weekend gubernatorial elections, raising the prospect of new protests and foreign sanctions against President Nicolas Maduro's government.

Maduro's candidates took 17 governorships, versus five for the opposition, in Sunday's nationwide poll, according to the pro-government electoral board.

The Socialist Party's strong showing came despite devastating food shortages, triple-digit inflation, and a collapsing currency in the South American OPEC nation.

Polls had suggested the opposition would easily win a majority.

Dismayed leaders of the Democratic Unity coalition decried irregularities, called for street action on Monday, and demanded an audit, but they did not offer any evidence of fraud.

"Neither Venezuelans nor the world will swallow this fiction," said grave-faced opposition campaign chief Gerardo Blyde. "We played by the rules with a democratic conscience ... but this electoral system is not trustworthy."

Critics called for the electoral board to release detailed results, to cross-reference with opposition observers' tallies. (http://www.cne.gob.ve/resultadostregionales2017/)

Results for one of the 23 states, southern Bolivar, were still not given by early Monday afternoon, though on Sunday night the board's web site briefly gave it to the opposition.

Dispirited about chances of removing Maduro through protests or the ballot box, many Venezuelan opposition supporters now hope foreign pressure will hurt him.

The Trump administration has already imposed sanctions on Venezuelan officials, including Maduro, and on the government's ability to raise more funds via foreign debt.

The European Union could also take measures against Maduro, a former bus driver and foreign minister narrowly elected to replace the late leader Hugo Chavez in 2013.

FRENCH CONDEMNATION

France, whose President Emmanuel Macron has called Venezuela a dictatorship, expressed concern at claims of "serious irregularities" and "lack of transparency" in the results.

"France deplores this situation and is working with its EU partners to examine appropriate measures to help resolve the serious crisis," its foreign ministry said.

Venezuela's government does retain significant support in poorer, rural settings, however. And it seems unlikely that supporters of the elite-led opposition, which has struggled to capitalize on discontent over the economy, will return to the streets after months of grueling protests earlier this year.

Those actions failed to pressure the government into holding an early presidential election, freeing scores of jailed activists or accepting foreign humanitarian aid.

At least 125 people died, while thousands were injured and arrested in violence that brought parts of Venezuela to a standstill as hooded youths battled security forces.

"Obviously, this was a brutal fraud," said David Osorio, 21, who lost an eye when hit by a gas cannister during those clashes. "But I don't know if going back to the streets is best ... because the same will happen and many are simply not willing."

Sunday's disputed result will likely dash opposition hopes the unpopular Maduro can be removed in next year's presidential election, possibly worsening disputes over strategy in the perennially divided coalition.

One prominent opposition figure, legislator Jose Guerra, said the coalition should be careful about calling the results fraud, saying disillusioned supporters who stayed away from the polls played a big role.

"We shot ourselves in the foot," he said, noting record turnout of 74 percent in 2015 legislative elections, which the opposition won, versus 61 percent on Sunday.

The opposition's electoral setback could further speed a flow of emigrants to other Latin American countries, Spain, and the United States, as many Venezuelans now fear the long-running political crisis will drag on for years.

"There's no money, no food, no medicine, no security. Yet according to the government, everyone voted for them?" said a skeptical Gloria Torres, 56, once a staunch supporter of Chavez. Of her two children, one has gone to Canada and the other is looking to leave.

'WHEN THEY LOSE, THEY CRY FRAUD'

Flanked by his powerful wife, soldiers, and red-shirted party members, a buoyant Maduro appeared on state television to celebrate victory and paint the opposition as sore losers.

"When they lose they cry fraud. When they win they shout 'Down with Maduro,"' said Maduro, 54.

The opposition pocketed governorships including the turbulent Andean states of Merida and Tachira and the oil-producing region of Zulia. The government, which had previously controlled 20 governorships, took states across Venezuela's languid plains and steamy Caribbean coast.

It won back populous Miranda state, which includes part of the capital Caracas, and also won in Barinas, Chavez's home state, where his younger brother retained the top job.

The opposition has denounced fraud in past votes, but it has lacked substantial detailed evidence and there were no conventional foreign observer missions for Sunday's election.

"The result (on Sunday) is another sham. It is inconceivable the Socialist Party won 54 percent of the vote, as President Nicolas Maduro claimed, even with abstentions affecting the Democratic Union vote," said an analyst Nicholas Watson at the Teneo Intelligence consultancy.

"(But) the opposition's case that the government committed fraud will be difficult to prove, and any legal challenges will likely come to nothing in government-controlled courts, while the election board will choke off demands for a vote audit."

(Additional reporting by Andrew Cawthorne, Deisy Buitrago, Diego Ore, Eyanir Chinea, Corina Pons, Girish Gupta in Caracas and Isaac Urrutia in Maracaibo; Writing by Alexandra Ulmer and Girish Gupta; Editing by Andrew Cawthorne and Tom Brown)