At least a quarter of a million people filled the streets of El Salvador's capital San Salvador in honour of Archbishop Oscar Romero, beatified yesterday.

The rite indicates that someone is recognised by the Catholic Church as having entered into heaven and can intercede with God on behalf of individuals who pray in his or her name. It is regarded as the final step before sainthood.

Archbishop of San Salvador, Luis Escobar Alas, and Vatican envoy Cardinal Angelo Amato conducted the ceremony.

The event began with a procession from the cathedral where Archbishop Romero's remains were buried to the El Salvador del Mundo Plaza several kilometres away.

Twenty-seven giant TV screens were placed across the capital so that those who could not see the stage could still take part and two square miles of nearby streets were closed to traffic. Hotels in San Salvador were at capacity and the event was expected to generate $31 million in economic activity.

Romero's beatification has been welcomed across the theological spectrum as a sign of the Catholic Church's commitment to justice and peacemaking.

A spokeswoman for Christian Aid partner PROCARES said that the beatification represented a new and important chapter in the country's history, and a chance to highlight ongoing injustices. Berta Aguirre said: "Romero's beatification means a lot for this country and for the victims of the Civil War. It highlights the terrible situation of repression and injustice that many of us have lived with for years.

"Romero was a man of faith. His only sin was to preach the Gospel. As a great Jesuit once said: 'With Romero, Jesus passed through El Salvador.'"

Oscar Romero was appointed as Archbishop of San Salvador in 1977 and was expected to be a less confrontational figure than his predecessor Luis Chávez y González, who supported workers and peasants organisations and was a strong critic of the massacres and disappearances perpetrated by the ruling military junta.

However, the murder of one of his closest friends by a state death squad, Jesuit priest Rutilio Grande, gave him the opportunity to show his mettle. Romero wrote later: "When I looked at Rutilio lying there dead I thought, 'If they have killed him for doing what he did, then I too have to walk the same path.'"

Romero cancelled Sunday mass throughout the country and brought the Church together in the capital's cathedral for a single service, publicly naming the government as responsible for Grande's death. He refused an invitation to be present at the inauguration of the new President, General Carlos Romero, two months later. The Vatican's representative, who had lobbied for his appointment, was furious with him and half El Salvador's bishops accused him of treason. He began to receive death threats from right-wing organisations.

Romero did not regard himself as a theologian and did not align himself with the political Liberation Theology movement. However, he said: "Between the powerful and the wealthy, and the poor and vulnerable, who should a pastor side with? I have no doubts. A pastor should stay with his people."

He gave many speeches challenging the support of the US for the repressive Salvadoran regime and called on soldiers to disobey orders to fire on civilians. He wrote to US president Jimmy Carter that military aid for the junta would""undoubtedly sharpen the injustice and the political repression inflicted on the organized people, whose struggle has often been for their most basic human rights"; Carter ignored his pleas.

In spite of his theological orthodoxy he was regarded with suspicion by Pope John Paul II, whose experience in Poland had taught him that the Left, not the Right, were the oppressors. When Romero met him at the Vatican, the Pope told him that maintaining the unity of the episcopate was the main problem facing the Salvadoran Church.

In February 1980 he spoke at the Catholic University of Louvain in Belgium, saying: "In less than three years, more than fifty priests have been attacked, threatened, calumniated. Six are already martyrs--they were murdered. Some have been tortured and others expelled [from the country]. Nuns have also been persecuted. The archdiocesan radio station and educational institutions that are Catholic or of a Christian inspiration have been attacked, threatened, intimidated, even bombed. Several parish communities have been raided.

"If all this has happened to persons who are the most evident representatives of the Church, you can guess what has happened to ordinary Christians, to the campesinos, catechists, lay ministers, and to the ecclesial base communities. There have been threats, arrests, tortures, murders, numbering in the hundreds and thousands....

"But it is important to note why [the Church] has been persecuted. Not any and every priest has been persecuted, not any and every institution has been attacked. That part of the Church has been attacked and persecuted that put itself on the side of the people and went to the people's defense. Here again we find the same key to understanding the persecution of the church: the poor."

The following month, on March 24, he was assassinated by a regime death squad believed to have been led by a former Army major, Roberto d'Aubuisson.

Pope John Paul II prayed at Romero's tomb in San Salvador Cathedral during his first visit there in 1983, describing him as a "zealous and venerated pastor who tried to stop violence". His sainthood cause was opened in 1993 but stalled over political questions: Pope Benedict XVI told reporters in 2007 that some groups had complicated the sainthood cause by trying to co-opt the archbishop as a political figure.

However, it is the present Pope who has found his message most congenial. Pope Francis officially declared him a martyr earlier this year, edging him closer to sainthood. His own experiences under the vicious Argentinian junta have given him a fellow-feeling with Romero, and Romero's emphasis on the Church needing to be in solidarity with the poor has been a keynote of Francis' message.

Romero is still a controversial figure in El Salvador, immensely popular with the poor but still regarded as a traitor by the Right. His murder ushered in a civil war which lasted until 1992, when it was brought to an end in a UN-brokered deal. The country is still plagued with corruption, poverty and drug-related criminal violence.