(Adds opposition lawmaker, context on crisis)
CARACAS, Oct 27 (Reuters) - Venezuelan state oil company PDVSA began making a major bond payment due on Friday, easing short-term fears about default but leaving the leftist government with less cash to attend food shortages in the crisis-stricken OPEC member.
Investors had fretted this week that cash-flow problems and regulatory hurdles resulting from U.S. sanctions on the government of President Nicolas Maduro may leave the company unable to make the nearly $1 billion payment.
Default would increase the financial isolation of Venezuela, which is struggling under Soviet-style product shortages and triple-digit inflation, and put additional pressure on a population already facing rising malnutrition.
But markets broadly believe Venezuela is willing and able to pay and any delay would thus be a result of factors beyond PDVSA's control, rather than a non-payment for lack of funds.
"(PDVSA) has knocked down the doomsday voices that were betting on economic meltdown and attacking the Venezuelan people, in conspiracy with the global economic oligarchy, with the aim of destabilizing and sabotaging the Bolivarian government's economic advances," PDVSA said in a statement.
PDVSA transferred $841.88 million in principal on the 2020 bond to accounts at JP Morgan, the statement added, without mentioning the outstanding $143 million coupon payment also due.
That indicates PDVSA is using the 30-day grace period to make that payment, pushing the total of unpaid Venezuela and PDVSA coupons up to nearly $650 million and serving as a further reminder of the country's cash-flow problems.
JP Morgan and PDVSA did not immediately respond to requests for comment.
Investor concerns will now turn to the company's next looming large debt commitments. PDVSA faces a $1.2 billion debt payment next week, while Venezuela and PDVSA have around $10 billion in bond service next year.
"At some point down the road, if it's not tomorrow it's going to be, who knows, in some months, in one year - the risk of a (default) is very high," said Mauro Roca, sovereign analyst at asset manager TCW, which has $201.6 billion under management.
Roca added that U.S. sanctions against Maduro, which bar banks from providing new financing to Venezuela, will make a debt restructuring impossible - further clouding the long-term panorama.
Cash-strapped Venezuela has cut food imports and slashed sales of dollars through official mechanisms to ensure Friday's payment. That has contributed to the bolivar currency tumbling 34 percent on the black market in the last month, and appears to have worsened food shortages in the country where millions are not eating properly.
"After today's payment of financial debt, the social debt remains unpaid, with a population dying of hunger, stricken by illnesses, and hopeless," said opposition lawmaker and economist Jose Guerra.
The opposition says late President Hugo Chavez recklessly issued bonds during a decade-long oil bonanza, and that many of the proceeds evaporated in mismanaged projects and corruption.
"Bondholders shouldn't be blamed... The blame goes to those who irresponsibly indebted Venezuela," added Guerra.
Venezuela and PDVSA bonds had risen earlier in the morning following a Reuters report that the payment had been initiated.
PDVSA's 2017N bond, which comes due on Thursday, was up 7.150 points to a bid price of 96.500, according to Thomson Reuters data, while Venezuela's 2022 bond was up 3.8750 points to bid 44.250.
Bondholders have for years shrugged off Venezuela's economic implosion, insisting Maduro's willingness to pay and Venezuela's substantial offshore assets made the high-yield debt a good bet.
But sources close to the operation this week said Maduro had considered not paying, and that the last-minute approval came after intense discussions among cabinet members about the potential benefits of defaulting.
The 2020 bond, which was issued last year as part of a refinancing effort, is backed by shares of PDVSA's Citgo U.S. refining and marketing subsidiary.
Failure to make a timely payment could lead some creditors to declare the bonds in default and litigate to receive Citgo shares.
Sanctions this year by U.S. President Donald Trump's administration block U.S. banks from providing new financing to Venezuela but allow them to carry out routine operations, including making bond payments for Venezuela-based entities.
Since the sanctions, financial institutions have insisted on greater documentation for Venezuelan transactions.
Russia on Friday separately said it was ready to restructure $3 billion in debt between the two countries, which included the possibility of postponing a debt repayment.
Venezuela has borrowed billions of dollars from Russia and China over the years, primarily through oil-for-loan deals that over time have crimped the country's hard currency revenue by requiring oil shipments to be used as service on those loans. (Reporting by Alexandra Ulmer and Corina Pons,; Additional reporting by Eyanir Chinea and Deisy Buitrago in Caracas, Paul Kilby and Dion Rabouin in New York; Writing by Brian Ellsworth; Editing by Dan Grebler and Alistair Bell)