The ousted president of Paraguay, Fernando Lugo, has denounced his removal from office as a "parliamentary coup" that was not based on proper evidence.

Lugo, who was impeached on Friday by a Congress which accused him of failing to maintain social harmony, said his opponents had sidelined him because of his efforts to help the poor.

Asked whether he had any hope of retaking office, Lugo exhorted his followers to remain peaceful but suggested that popular national and international clamour could lead Paraguayan politicians to reverse his impeachment.

"In politics, anything is possible," Lugo said.

On Sunday he stepped up his fightback, setting up an alternative government and pledging to upstage Paraguay's new leaders at an upcoming regional summit.

The impeachment has had wider regional implications. Venezuelan President Hugo Chavez said his government will cut off fuel sales to Paraguay.

The country has been suspended from the South American trade bloc, Mercosur, whose other members are Argentina, Brazil and Uruguay, and has been barred from taking part in a gathering set to start on Monday in Mendoza, Argentina.

The Argentinian president, Cristina Fernández de Kirchner, called the move against Lugo a coup. On Saturday Argentina recalled its ambassador from Paraguay, as did Brazil, which condemned Lugo's removal because he was not able to defend himself properly, "compromising a fundamental pillar of democracy".

Brazil is Paraguay's top trading partner and Latin America's biggest economy. Its stance will probably carry the most weight but it says it will seek consensus within the Unasur group of South American nations rather than act unilaterally.

Paraguay's new president, Federico Franco, said he would work to convince Argentina to reinstate its ambassador and would explain to other governments in the region that the impeachment was legal.

Lugo "recognised he faced a tribunal, he recognised the tribunal's verdict and finally he agreed to step down. Even more importantly, he asked for people to remain peaceful so no more blood would be shed," Franco said. "At no time was there a rupture or a coup, there was simply a change of leadership in line with the constitution and the country's laws."

Paraguay is one of the poorest countries in South America and Lugo, now 61, vowed to improve the quality of life of low-income families when his election ended 60 years of Colorado party rule. But he struggled to push reforms, including land redistribution to poor peasant farmers, through Congress.

A cancer scare and several paternity scandals dating back to his time as a bishop added to his difficulties.

While many Latin American countries are unhappy with the lightning-fast impeachment, analysts say they are unlikely to force the issue if Lugo himself doesn't fight to be restored.

"Neighbouring countries can refuse to recognise the new government, complicate negotiations or end co-operation. But I don't think they will fight for this very hard," said Milda Rivarola, a Paraguayan historian and political analyst.