The announcement that the 58-year leader was too ill to leave his hospital bed in Havana, Cuba where he is suffering complications following a fourth round of cancer surgery a month ago, came as no surprise.
But the government insisted that he needed more time to recover and would remain in power until he could be sworn in by the Supreme Court at a later date.
Vice President Nicolas Maduro, named by President Chavez as his chosen successor, made the announcement in the National Assembly in Caracas on Tuesday.
The decision came amid a storm of controversy over whether such a move was allowed within the constitution, which states that new elections must be held within 30 days if the president dies or is "permanently incapacitated" before he takes office.
Opposition members had earlier urged the Supreme Court to rule out a postponement of Thursday's inauguration as unconstitutional but the body on Tuesday supported the government position.
"I do not know what the judges of the Supreme Court are waiting for. Right now in Venezuela, without any doubt whatsoever, a constitutional conflict has arisen," said Henrique Capriles, the opposition leader who lost to President Chavez by 11 percentage points in the October election.
"Far from guaranteeing peace and tranquillity it could lead to anarchy instead," he said.
President Chavez is suffering from a severe pulmonary infection that has resulted in a "respiratory insufficiency," officials have said. Unconfirmed reports have said he is living his last days and is in a drug-induced coma on a life support machine.
The government plans to hold a huge pro-Chavez rally with the participation of foreign leaders on Thursday - a reminder of the 55 percent support that won the leftist firebrand a convincing re-election.
Meanwhile the opposition has called for street protests raising the risks of confrontation in the oil-rich south American nation.
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