By Alexandra Valencia
MONTECRISTI, Ecuador, July 25 (Reuters) - President Rafael Correa's allies proposed a new constitution late on Thursday that would boost the leftist president's powers if Ecuadoreans approve it in a September referendum.
A cheering, flag-waving government-controlled assembly approved the proposal that would loosen presidential term limits and expand Correa's influence over the economy, Congress and judiciary if he wins the difficult vote. The issue had been debated for eight months.
Correa, an economist who took office last year pledging to fight political and business elites, needs the new constitution to shield himself from the sort of congressional or judicial offensives that have ousted several of his predecessors.
The fragmented opposition has branded him an autocrat who has seized TV networks, confiscated businesses and closed Congress. It accuses him of trying to amass powers in a similar way to his socialist ally Venezuelan President Hugo Chavez.
Correa is by far the most popular political figure in his oil-exporting country, and pollsters say he has a good chance of winning the referendum but will have to campaign hard to woo many wary Ecuadoreans before he can count on victory.
"We are going to beat them on Sept. 28... we are not going to let a bunch of mobsters dominate us forever," Correa said before the 130-member assembly passed the proposal in the coastal town of Montecristi.
If the new constitution passes, Correa will be able to run for re-election that could keep him in power until 2017.
In the decade before he took office, each elected president was forced out before completing his term by a mix of street protests, congressional pressure and court rulings.
CHAVEZ'S FOOTSTEPS
Correa is tracing the steps of other Latin American leftists -- in Venezuela and Bolivia -- who strengthened their governments with new constitutions that appealed to millions disenchanted by years of traditional political parties' rule.
He contends the constitution will help his government eliminate the influence of corrupt elites over political institutions and redistribute wealth from natural resource among the poor majority.
Foreign investors are closely watching the referendum campaign because it would gives Correa the power to increase state intervention in the flourishing oil and mining industries and to strip the central bank of its autonomy.
If the new constitution is approved, there will be general elections next year and Correa would be empowered to dissolve Congress if he wins.
It would also trigger an overhaul of the electoral tribunal and the Supreme Court, which several judges and opposition politicians say is aimed at boosting Correa's control over the judiciary.
"I say no to totalitarian rule by politicizing the judiciary," yelled Gilmar Gutierrez, an opposition leader during the debate. "No to prepackaged constitutional changes."
Political analysts say a shift in the balance of power under a new constitution would likely help Correa stay in office far longer than his three predecessors who were ousted during their four-year terms.
"More powers will help Correa bring political stability," said Patricia de la Torre, a professor at the Catholic University in Quito. "There are risks with more powers, but they are needed to change the country's political structure."
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