By Daniel Bases
CARACAS | Mon Oct 17, 2011 6:50pm EDT
(Reuters) - Venezuela's Supreme Court effectively blocked high-profile opposition challenger Leopoldo Lopez on Monday from running against President Hugo Chavez in a 2012 vote, rejecting an international court ruling that called the government's disqualification of Lopez unjustified.
The decision narrows the field of aspirants to take on President Chavez in the October 7, 2012, election for leadership of the South American OPEC member nation.
The Supreme Court ruling will draw the ire of human rights groups who say the socialist leader has stamped on freedoms in the nation of 29 million people.
Lopez, a 40-year-old U.S.-educated politician, was one of three leading opposition candidates vying to win the opposition coalition's presidential primary in February.
But the Supreme Court chose to ignore a ruling by the Costa Rica-based Inter-American Court of Human Rights last month that said Lopez's disqualification from politics over corruption allegations was unjustified.
"This Supreme Court ... declares that the Inter-American Court of Human Rights decision against the Venezuelan state cannot be executed," the court said in a statement, specifying that Lopez can run in elections but not take up any office.
The charismatic and baby-faced Lopez made his name as mayor of the wealthy Chacao district in Caracas. He was favored to win the race for mayor of the whole city in 2008, but he and scores of other politicians -- most from the opposition -- were blocked by Chavez's comptroller general.
Accused of but not tried for corruption, Lopez was barred from seeking public office until 2014.
One accusation stems from a donation state oil company PDVSA made in 1998 to a political organization of which he was a member. The donation was controversial because his mother, a PDVSA employee at the time, had signed the check.
Authorities also accused Lopez of illegal diversion of Chacao district funds under his control.
"The (court) ruling essentially kills Lopez's presidential aspirations, and favors (Henrique Capriles Radonski), who enjoys a substantial lead in the polls," said Risa Grais-Targow and Daniel Kerner, Eurasia Group political risk analysts.
"In this sense, it doesn't alter the political outlook substantially," they said in a note to clients.
Lopez, the son of a well-to-do family, says the accusations were trumped up and called it unconstitutional to suspend him from politics without first giving him a trial.
The human rights court is part of the Organization of American States, of which Venezuela is a member, and its decisions are supposed to be binding.
The opposition Democratic Unity coalition said Venezuela's decision not to abide by the international ruling was a "flagrant" abuse of rights.
"It's further evidence of the political dependence of (Venezuela's) public powers," it said in a statement. "We view this deplorable sentence as another reason for peaceful, democratic and constitutional change in our country."
The 57-year-old Chavez has taken a tough line on plenty of political opponents during his nearly 13-year rule. He accuses the OAS of being beholden to U.S. interests and has dismissed its court's stance on Lopez as "worthless.
Aides for Lopez said he would make a statement on the case on Tuesday. Speculation now centers on whether he will fight the decision or lend his support to another candidate.