 Mr Chavez accused the Colombian president of lying |
The move follows the decision by Colombian President Alvaro Uribe to end Mr Chavez's role as a hostage negotiator with Colombia's Farc rebels.
Mr Chavez said that the decision to end his mediation role was "a spit in the face" and denounced Mr Uribe as a liar.
In response, Mr Uribe said Mr Chavez wants Colombia to "become the victim of the terrorist government of the Farc".
"I declare before the world that I'm putting relations with Colombia in the freezer because I've completely lost confidence with everyone in the Colombian government," said Mr Chavez during a televised speech.
"The companies that Colombians have over here, the companies we have over there - all of that will be damaged," he told his cabinet.
In announcing the "freeze" in relations with Colombia, Mr Chavez compared the situation to his recent diplomatic row with Spain, which was triggered when the Spanish King, Juan Carlos, told him to "shut up" at a summit meeting in Chile.
"It's like the case of Spain: until the king of Spain apologises, I'm freezing relations with Spain," he said.
Hostage swap
Mr Chavez's threat to freeze relations with Colombia was a response to the recent decision by President Uribe to strip the Venezuelan president of his role as a mediator in negotiations with the Marxist Farc rebels aimed at securing the release of dozens of hostages seized by Farc during Colombia's civil war.
Attempts to free the hostages have been going on for several years, but the process appeared to take a step forward in August when Mr Chavez volunteered to act as an intermediary between the right-wing Colombian government and the left-wing rebels.
A plan was drawn up for the rebels to hand over 45 hostages in exchange for the release of 500 imprisoned Farc guerrillas.
It worries me that the search for an agreement will be used by the guerrillas to advance their policies 
But correspondents say Mr Uribe, whose own father was killed by the Farc, became increasingly irritated by Mr Chavez's apparent disregard for the proper diplomatic channels.
Photos had appeared of Mr Chavez posing with a Farc commander.
Then, earlier this week, Mr Chavez revealed that Mr Uribe had told him that he was prepared to meet Farc leader Manuel Marulanda.
This further angered the Colombian president, who said the conversation had been confidential.
Eventually, Mr Chavez was dropped after he defied a Colombian order not to be in direct contact with Colombia's army chief.
Relatives' sorrow
The French President, Nicolas Sarkozy, has urged Mr Uribe to reconsider his decision to end Mr Chavez's role.
President Sarkozy has taken a particular interest in the issue, because one of the hostages - Ingrid Betancourt - holds French citizenship.
Mr Sarkozy said he believed the Venezuelan leader was still the best person to broker an exchange.
Relatives of Farc-held hostages expressed shock and grief at the end of Mr Chavez's participation as dozens gathered near the presidential palace in Bogota to protest on Thursday.
"We thought it was very brave what President Chavez did in three months compared to what the government has failed to do in 10 years," Jose Uriel Perez, whose nephew was taken by Farc in 1998, told AP.
"Nothing touches this government - not the deaths, nor our mourning, nor the pain the families of the kidnapped live with."
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