Peru's rebel group twice as big as thought -army
* Shining Path group now estimated to number 600
* Generals want more military spending
By Marco Aquino and Terry Wade
LIMA, April 16 (Reuters) - Peru's military doubled its estimate for the size of the Shining Path guerrilla group to 600 on Thursday, after months of bloody ambushes in a coca-growing region that have killed at least 30 soldiers.
The deaths have piled up since August, when the army launched an offensive to retake control of the coca-rich Ene and Apurimac valleys. It has since realized there were more rebels than it had thought.
"This new estimate (of 600) is based on information we have received following attacks by the terrorists," Peru's joint chiefs of staff said.
Troops have been caught in 11 deadly ambushes this year, causing cracks in President Alan Garcia's Cabinet and criticism of his plan to stamp out people he calls "narcoterrorists."
His vice president, former admiral Luis Giampietri, said Peru must emphasize security if it hopes to remain popular with foreign investors.
Military generals this week complained that Peru took its eye off the ball after the Maoist Shining Path was all but defeated by former President Alberto Fujimori.
Funding for intelligence collection essentially dried up once Fujimori left office in 2000, and now troops say they are poorly equipped and fed.
But the generals have also stumbled. They were widely criticized this week after they admitted to sending young, inexperienced enlisted men to the jungle to root out rebels who have spent years eluding capture and setting booby traps.
Giampietri and Defense Minister Antero Flores have gone to Congress to rally political support for more military spending.
Giampietri blamed Finance Minister Luis Carranza for restricting outlays.
"The limitations come from the Finance Ministry, which is not giving us resources," Giampietri said.
"If we find ourselves again in a situation like the 1990s, there won't be any investment in this country and there won't be any money to go around."
The Shining Path, which was widely feared as one of Latin America's most brutal insurgencies, destabilized Peru for years. It had thousands of supporters and nearly overthrew the government.
The group largely disintegrated after its leaders were captured in the 1990s. Some members fled to the jungle and mostly abandoned their ideological struggle for the lucrative drug trade.
Garcia's plan includes sending the army to capture rebels and employing government agencies to build schools and hospitals in towns that have missed out on a wave of foreign investment that has swept the Andean country.
Like top cocaine producer Colombia, Peru receives anti-drug money from the United States and supports programs to eradicate coca fields.
But the Shining Path has deep pockets that allow it to buy allegiances in dirt-poor towns where people often rely on coca planting for income.
"The group has changed its strategy, they go into towns to persuade people and buy them food. They have money," said an official at the joint chiefs of staff. (Editing by Mohammad Zargham)
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