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Bolivia's Morales bars "spying" U.S. DEA agents

CHIMORE, Bolivia (Reuters) - Bolivia’s leftist President Evo Morales accused U.S. anti-drug agents of spying on Saturday, and barred them from fighting cocaine traffickers in the Andean country until further notice.

“There were DEA (Drug Enforcement Administration) agents that were doing political espionage, ... financing criminal groups so that they could act against authorities, even the president,” Morales said.

Morales accused the DEA of maintaining ties with anti-government groups that staged violent protests in eastern and central regions governed by the opposition in September. He said the organization’s actions amounted to conspiracy.

“This is a personal decision. ... From now on, the DEA is not allowed to act in the country until further notice,” said Morales, who stopped short of expelling DEA agents.

Morales had already banned DEA flights over the country.

Impoverished Bolivia is the world’s third-largest cocaine producer after Colombia and Peru. Last month, the United States added Bolivia to a list of states that had “failed demonstrably” to meet their counter-narcotics obligations.

The United States called Morales’ accusations absurd.

“We reject accusations that the DEA or any other U.S. government agency has supported the opposition or conspired against the Bolivian government,” the U.S. Embassy in La Paz cited a State Department official as saying. “These accusations are false and absurd.”

“If cooperation with the United States is suspended, more drugs will be produced in Bolivia,” it added. “The resulting effects of corruption, violence and tragedy will mainly hurt Bolivia itself.”

The U.S. government has taken steps to suspend trade benefits for Bolivia because of what officials described as its poor cooperation in fighting drug trafficking.

Washington says coca acreage in Bolivia has increased significantly, but the Morales government says it rose only 5 percent last year.

Relations between the two nations were upset in September when Morales expelled the U.S. ambassador, after accusing him of meddling.

The State Department then ejected the Bolivian envoy, calling Morales’ action a grave error, and said it was the first time in three decades a U.S. envoy was declared “persona non grata” anywhere in the world.

Since taking office in 2006, Morales has pursued a policy of “zero cocaine but not zero coca,” which gives tens of thousands of farmers permission to grow coca on small plots for legal uses.

Morales built his political career as a leader of Bolivia’s coca growers and wants to develop legal markets for coca leaves while fighting the cocaine trade.

The coca leaf is the main ingredient for cocaine but it is also widely used by Bolivian Indians, who chew it for its medicinal and nutritional properties.

Writing by Eduardo Garcia; editing by Simon Gardner and Todd Eastham