Two weeks of road blockades led by the Bolivian Workers' Central, peasant unions and the country's powerful mining federation have left the seat of government in La Paz effectively cut off from the rest of Bolivia, in the worst test yet of President Rodrigo Paz's five-month-old administration. Markets in the capital are empty of vegetables and meat, and several hospitals reported critical oxygen shortages on Tuesday.

The immediate trigger is a law passed last month allowing rural land to be used as collateral for bank loans, which protesters say will accelerate the consolidation of Andean smallholdings by agribusiness. The deeper background is an economic crisis that has driven inflation above 25 per cent, drained dollar reserves to historic lows and prompted the politically fraught removal of long-standing fuel subsidies in March.

Business federations estimate the blockades are costing the economy more than $50 million a day, with roughly 5,000 trucks stranded on the main routes into the capital. The government has confirmed at least three deaths attributable to emergency vehicles being unable to reach hospitals.

Mr Paz, who took office in November after defeating the candidate of former president Evo Morales's MAS-IPSP movement in a runoff, on Tuesday announced he would reshuffle his cabinet and travel to Cochabamba to meet union leaders directly. He has not, despite calls from sectors of the opposition, offered to repeal the land law.

Mr Morales, barred from contesting last year's election by a constitutional ruling, has used his radio platforms to encourage participation in the blockades while stopping short of explicitly calling for the president's resignation. Supporters of the former leader clashed with police in central La Paz on Sunday in the most violent day of the crisis so far.

The Organization of American States and US Secretary of State Marco Rubio have both urged dialogue, with Mr Rubio explicitly distancing Washington from any extra-constitutional pressure on the government. The Bolivian peso boliviano has weakened to a new low on the parallel market, where it now trades at almost twice the official rate.