The transfer of Venezuela's most prominent political prisoner from a military stockade to house arrest was widely viewed as a peace offering by President Nicolas Maduro to opponents who have led months of street protests against his beleaguered government.

In a speech Saturday, the day opposition leader Leopoldo Lopez was sent home after three years behind bars, Maduro said: "God willing, this decision will be understood" as a gesture of peace and reconciliation.

But amid a government crackdown on democratic freedoms, including a plan to write a new constitution that could give the president more power, opposition leaders plan to press forward with more protests.

I stand firm in my resistance to this regime - Leopoldo Lopez, opposition leader

"Just because Leopoldo Lopez is free doesn't mean people will go back to their houses and rest," said Alfredo Romero, director of Foro Penal, a legal aid group that represents political prisoners.

A right-wing former mayor, Lopez was arrested in 2014 on what rights activists call trumped-up charges of inciting violence during an earlier round of protests. He was sentenced to nearly 14 years and spent the first three at the Ramo Verde military prison before he was granted house arrest.

'Firm in my resistance' to regime

Opposition leader Leopoldo Lopez holds a Venezuelan national flag as he greets supporters outside his home in Caracas. It's unclear why he was released from prison into house arrest. (Fernando Llano/Associated Press) Venezuela's Supreme Court said health issues were among the reasons for the move. But during a brief appearance before supporters outside his house in an upscale Caracas neighborhood a healthy-looking Lopez held up a Venezuelan flag and a clenched fist. In a communiqué​, he declared: "I stand firm in my resistance to this regime."

Lopez and other critics claim that Venezuela's economic meltdown and political turmoil are so dire that the government must move forward presidential elections that are currently scheduled to take place next year.

But Maduro, whose job-approval rating hovers around 20 per cent in opinion polls, no longer seems to trust the will of the people. Last year, election officials who are seen as loyal to Maduro cancelled a recall election that could have removed him from office. They also postponed elections for state governors that were supposed to take place last December.

Meanwhile, Maduro is cooking up a constitutional rewrite. On July 30, Venezuelans will go to the polls to elect a special assembly that will be tasked with writing a new Magna Carta.

During a recent meeting of assembly candidates in a park in downtown Caracas, many wore red shirts and caps — the colours of the ruling Socialist Party — and repeated Maduro's mantra that a new constitution will bring peace to this deeply polarized nation.

Plan for constitutional reform

"The nation is one big family and sometimes you have a problem in the family," said Carlos Gonzalez, a retired oil worker who is one of some 6,000 candidates vying for about 500 seats in the assembly. "So you bring everyone together and work things out."

Census takers in Caracas take a list of what the poor need as they urge a vote on the special assembly. (John Otis/CBC) However, legal experts say the entire exercise is illegal because under the current constitution, the government must first hold a referendum to ask Venezuelans whether or not they want a new constitution, a requirement Maduro has ignored. Moreover, the byzantine voting rules heavily favour the election of delegates loyal to the government.

While the special assembly is in session, which could last for a year or more, it will have extraordinary powers. It could, for example, dissolve Congress, replace Venezuela's 23 state governments with regional councils loyal to the ruling party, or postpone presidential elections that are supposed to take place by the end of next year.

"Venezuela would become a dictatorship because the country's democratic institutions would no longer have any power," said Benjamin Scharifker, dean of Metropolitan University in Caracas.

Democracy faltering

A masked men kicks at opposition lawmaker Franco Casella in a melee with pro-government militias who tried to force their way into the National Assembly on July 5. (Fernando Llano/Associated Press) Venezuela's democracy is already faltering, according to Jose Miguel Vivanco, who monitors Latin America for Human Rights Watch and who now refers to Maduro as a dictator.

Eighteen years after the late Hugo Chavez ushered in a leftist revolution, the Socialist Party controls all branches of government except for Congress, which it has tried to sabotage through legal ploys and violence, including an attack last week by pro-government thugs who beat opposition lawmakers with rocks and metal pipes. Meanwhile, the government has cracked down on the media and continues to hold more than 400 political prisoners, according to Romero of Foro Penal.

The release of Lopez was a rare bit of good news for the opposition, an achievement it hopes to build upon with a bit of political theatre.

It is now calling on Venezuelans to boycott the July 30 balloting for the special assembly and to instead take part in a symbolic referendum on Saturday (July 16) in which they will be asked whether they want a new constitution.

Unofficial referendum on constitutional rewrite

Juan Guaido, an opposition congressman, said that the plan is to embarrass and delegitimize the government with a massive public rejection of the constitutional rewrite. He predicts up to 10 million Venezuelans will turn out for the unofficial referendum, far more – he claims – than will participate in the election for the special assembly.

But the government has its own formidable ground game. It is sending brigades of volunteers into poor barrios where they assure people that the Maduro government will provide them everything from new homes to kitchen appliances to medicine in exchange for voting in the special assembly election.

During a recent visit to a Caracas slum, volunteer Lourdes Rojas, who wore a Hugo Chávez T-shirt, spent half an hour writing down the needs of a single mother living in a tin-roofed shanty. Just before leaving, she instructed the woman: "Now, make sure you go out and vote for the special assembly."