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Some might call it progressive, others might just say it is plain wacky. But there is no doubt the latest idea from London's Mayor Ken Livingstone has raised eyebrows.

This week Mr Livingstone announced one of his most curious ideas since taking office seven years ago - signing a deal with Venezuela's state-owned oil company to trade cheap oil for the city's public buses in return for providing technical assistance to the Latin American country.

The deal is the latest in a series of controversial moves by the left-leaning mayor that illustrate his sympathy for socialism and long-held anti-Americanism.

In the deal, announced on Tuesday, Venezuela's Petroleos de Venezuela Europa  would provide oil for the city's bus fleet at a 20 per cent discount. The city would then use the savings to provide half-price bus and tram travel for poor people receiving income benefits.

Mr Livingstone said as many as 250,000 people could save GBP280  (HK$4,272)   a year.

In return, London would provide specialist technical assistance to Venezuelan cities including  transport, environmental protection, tourism and urban planning.

'Both London and Venezuela will be exchanging those things in which they are rich to the mutual benefit of both,' said Mr Livingstone.

Venezuela's Minister of the Popular Power for Foreign Affairs Nicolas Maduro,  in town to announce the signing, added: 'This agreement will strengthen relationships between the peoples of London and Venezuela.

'It is a win-win strategy that fits within the policy of integration and the character of the Bolivarian government of President Hugo Chavez.'

Venezuela is the world's eighth-largest oil producer, and Mr Chavez has not been shy in using 'oil diplomacy' to help the poor and win influence in other countries, including the US. Mr Chavez announced a similar plan two years ago to provide cheap heating oil for poor people America.

Few other details of the London-Venezuela agreement  were released, a fact that prompted other members of the London Assembly, which has the power to scrutinise the mayor, to call for an investigation the day after the deal was announced.

Officials said the deal could save the British capital as much as #16 million  a year on its GBP100 million  fuel bill for its 8,000 city buses. However, other politicians in the assembly questioned the premise of the agreement.

Damian  Hockney,  leader of the One London Party, said the figures provided by the mayor did not add up.

If every one of the 250,000 eligible people saves GBP280  a year, that would mean GBP70 million,  Mr Hockney said. Even if only 20 per cent of people eligible take advantage of the cheaper fares, that would be GBP14 million, about the same amount being saved on fuel, he pointed out.

'The real issue is does it stack up financially,' Mr Hockney said. 'It's just not been thought through. It's a political statement.

'The bottom line is that this free oil could cost London up to GBP70 million',  as well as the cost of sending experts to Venezuela, he said.

The Liberal Democrat party said that on the face of it, the deal looked like a good one, but it was unclear whether people who receive the discount would  be cut off from income benefits.

Richard Barnes,  deputy leader of the assembly's Conservative Party members, said:  'Why does London, one of the richest capitals in the world, need to exploit a developing nation? This money would be better directed at the poor of Venezuela.'

But it is all par for the course for Mr Livingstone, a diehard socialist who has won the support - and ire - of Londoners for his tough stance on many issues. He has declared war on animal lovers feeding the pigeons in famed Trafalgar Square. And he introduced the concept of charging drivers GBP8 for driving into central London in an attempt to cut down on traffic congestion in the  narrow streets - a move that has turned out to be popular enough  for him to expand the zone this  week into the city's west.

He even accused  American ambassador Robert Tuttle  and his staff of skipping out on congestion charge bills, calling him a 'chiselling little crook'.

Mr Livingstone hates the US and admires Cuban leader Fidel Castro, who was a close ally of Mr Chavez, said Tony Travers, director of the Greater London Group at the London School of Economics.

'It has  to be seen through the powerful showmanship of Livingstone and Chavez,' said Professor Travers.

'In the case of Livingstone, [he] is of a generation of left-wing politicians who kind of admired Castro in the '60s and '70s and by embracing anti-American leftist leaders know that it's a cheap and cheerful way of aggravating their opponents on the right.'



'Red' mayor shows anti-US slant in Venezuela oil deal