Bowler-hatted women in multi-layered skirts with babies slung on their backs are what tourists expect to see in the streets of La Paz, the Bolivian capital, which lies surrounded by the snowcapped Andes, 4,270 metres (14,000ft) above sea level.

But this week, together with men in ponchos and woollen hats, some of the women walked into congress, not as street sellers but to take their seats in Bolivia's newly elected parliament.

Only a third of the previous representatives were re-elected and more than 50 of the 157 seats in the chambers of senators and deputies have gone to what are known as "original inhabitants", representing trade unions and peasant and indigenous groups.

Facilities for simultaneous translation into Bolivia's three main indigenous languages - Aymara, Quechua and Guarani - are being hurriedly installed.

"It's a sort of peaceful, democratic, Zapatista revolution," the economist Humberto Vacaflor said.

For three centuries taxes imposed on native Bolivians were the main source of revenue for the Spanish conquerors, and the terrible conditions in the Europeans' silver mines of Potosi took millions of lives.

The descendants of these original inhabitants account for almost 60% of Bolivia's population of 8m, but they have never had a proportionate representation in parliament or government.

Most of the new representatives in congress belong to MAS (the Movement Towards Socialism), founded five years ago by the charismatic coca growers' leader Evo Morales.

A hawk-nosed Aymara who favours a blue windcheater rather than traditional dress, Mr Morales, 42, upset the pollsters by coming second in the first round of the presidential election on June 30.

Today the congress must choose between him and the US-educated Gonzalo Sanchez de Lozada, of the right-of-centre MNR (National Revolutionary Movement).

The success of MAS is attributed to widespread discontent with the last government.

Although Bolivia has huge resources of gas, oil and other minerals, it is the poorest country in South America, with few industries and thousands of rural communities living at subsistence level.

Recent freak snowstorms killed more than 70,000 llamas in one of the poorest areas near Potosi, leaving many indigenous communities on the verge of starvation.

Mr Sanchez de Lozada was president in the mid-1990s, when the 50,000 miners of the once powerful state mining business were reduced to 5,000. For many unemployed miners the only work available was in the coca fields.

Chewing the coca leaf to alleviate tiredness and hunger, has always been an integral part of Aymara and Quechua culture. Growing coca for cocaine began in earnest in the 1970s under the US-supported anti-communist dictatorship of General Hugo Banzer.

In the 1990s the Americans funded an eradication programme which pulled up 90% of the coca bushes in the Chapare region, at the cost of 300 lives in confrontations with troops. Alternative crops were introduced, but often found no markets.

Mr Morales emerged as the coca growers' leader, resisting the eradication programme. His stance has earned him a place on the US government's list of international terrorists.

The US drugs policy in Latin America has always tended to the big stick: during the election campaign its ambassador to Bolivia bluntly warned that the election of Mr Morales would endanger US-Bolivia aid and trade.

And to rub in the message, the man who will head the US delegation to the inauguration ceremony of the new president next week, whoever wins, is the American drugs tsar, John Walters.

Mr Morales told the Guardian: "Growing coca is not drug trafficking. These programmes, like Plan Colombia, only serve to exterminate indigenous populations, not the drug trade.

"The answer is not to eradicate the coca plant but to eradicate demand in the US and control the drug money. Fifty per cent of it is laundered through US banks."

To win the presidency in this weekend's second round, the MNR has formed a coalition with the Revolutionary Left Movement, which has moved to the right.

They are putting behind them 13 years of bitter rivalry to ensure "governability" and maintain the neo-liberal policies of the past 10 years, which have left 63% of Bolivians below the poverty line.