* Scandal-ridden DAS intelligence agency to be dismantled
* Decision could improve prospects for U.S. trade deal
BOGOTA, Sept 18 (Reuters) - Colombia's state intelligence agency will be dissolved, the government said on Friday, following a flood of scandals in which agents are accused of wire-tapping judges, reporters and opposition politicians.
Former officials of the DAS agency are also being investigated for taking bribes in exchange for providing right-wing cocaine-funded paramilitaries with hit lists of union leaders and human rights activists.
Agents are accused of continuing to listen in on the phone conversations of politicians, rights workers and journalists despite public outcry over the practice.
"The DAS will be dissolved in order to make way for a new civilian intelligence agency," DAS chief Felipe Munoz said in a statement posted on Colombia's presidential website.
"A definitive change is needed," the statement said.
The new agency will offer "absolute trust and transparency," it said.
The move could help allay fears in Washington among Democratic lawmakers who have blocked a trade deal with Colombia based on accusations that President Alvaro Uribe has allowed local union leaders to be persecuted with impunity.
Uribe, Washington's main ally in South America, said on Thursday that the DAS should be dismantled and that the national police could take over many of its responsibilities.
A bill will be presented to Congress next week proposing the end of the DAS and outlining the structure of the new intelligence agency, according to Munoz's statement.
More than 40 former DAS employees are being investigated over the telephone-bugging accusations.
Despite these and other scandals, Uribe is seen as a hero to many for his crackdown on Marxist guerrillas. He may stand for an unprecedented third term next year if his supporters manage to amend the constitution to allow him to run.
Margaret Sekaggya, U.N. special rapporteur on human rights defenders, earlier on Friday called on the DAS to stop its illegal monitoring of activists.
She said the surveillance has been used to trump up false charges against rights workers, who are regularly accused by government officials of supporting the outlawed rebel army known as the FARC. (Reporting by Hugh Bronstein; editing by Mohammad Zargham)
Our Standards: The Thomson Reuters Trust Principles.