Fernando Lugo, the retired Bishop of San Pedro, who submitted his resignation from the priesthood last year in order to stand for President of Paraguay, was notified by the Vatican last week that he had been suspended from his priestly functions, but he remained a member of the clergy and must not engage in politics.

The decree, signed by Cardinal Giovanni Battista Re, Prefect of the Congregation for Bishops and President of the Pontifical Commission for Latin America, followed a warning in December that Pope Benedict had turned down the bishop's request to return to the laity, but he would be suspended a divinis - prohibited from celebrating the Divine offices - if he did not withdraw his candidacy.

Far from doing so, Bishop Lugo confirmed that he hoped to represent an alliance of citizens' movements and minority political parties in the 2008 presidential elections. The alliance, known as the National Accord, has yet to select its presidential candidate, but Bishop Lugo, 55, is one of the front-runners, and his supporters insist that there is no legal impediment to his candidacy under Paraguay's constitution, in which there is separation of Church and State.

Meanwhile in Nicaragua President Daniel Ortega has invited Cardinal Miguel Obando y Bravo, who is 81 and retired, to join his Government as chairman of the National Reconciliation Council. But the secretary of the bishops' conference, Bishop Sócrates René Sándigo of Juigalpa, this week urged him not to accept, saying it would be "a catastrophe for the faith of many Nicaraguans".

The Archbishop of Managua, Mgr Leopoldo Brenes, said that priests were not permitted to participate in party politics or accept government posts. But he acknowledged that the cardinal was not under his authority, and did not represent the Nicaraguan Church.