"Thank you Mr. President for a new home," said Gavilanez, who was forced to flee her village when the Tungurahua, as the volcano is known in native Quichua language, burst into life again on Wednesday.

Ecuador has struggled to resettle hundreds of poor farmers who live on the shadow of Tungurahua, which began a new eruption cycle in 1999. Peasants often defy the roaring volcano and climb back to their mud-home hamlets to tender their crops and livestock.

"Together we will fight against nature if necessary, and we will defeat it," Correa, a US-trained economist, told hundreds of evacuees near the slopes of the volcano located 80 miles (130 km) south of the capital, Quito.

In 2006, streams of fast-moving molten rock enveloped several hamlets near the Tungurahua's crater, killing at least four people and forcing thousands to evacuate and lose their corn and potato crops.

Volcanologist say the 16,460-foot (5,020-metre) volcano remains unpredictable with several loud explosions recorded throughout the week.

The government is also planning to divide 300 hectares of rural land among the evacuees, many of whom are sleeping in schools and churches serving as make-shift shelters.

"The goal is for these families to regain what the volcano has taken from them. We want to give them housing and land," said the mayor of Penipe Juan Salazar.

The volcano's activity this week did not harm any villagers, but molten rock flowed through streams and rock fragments showered nearby hamlets, emergency officials said.