Bolivian President Evo Morales said Saturday that he was suspending the work of the U.S. Drug Enforcement Administration in Bolivia and that the government will take control of its activities in the war on drugs.

Morales made the remarks in a speech in a remote part of Bolivia, carried on national television and radio stations.

The announcement comes more than a month after Morales kicked DEA agents out of the country's coca-producing Chapare region, saying the government could no longer protect them amid a growing revolt. At least 30 people died in the violence, and Morales accused Washington of fomenting the unrest.

Bolivia and the United States each expelled the other's ambassadors in September as well, and Morales launched a verbal assault against the U.S. government at the United Nations General Assembly.

For its part, the United States accused Bolivia of not doing enough to stop the flow of drugs out of the country. Last month, President Bush said he had proposed cutting off special trade deals with Bolivia "until it fulfills its obligations."

As he left Bolivia after his expulsion, U.S. ambassador Philip Goldberg warned the Bolivian government that reducing ties with Washington was "a grave mistake."

Morales' accusations that the United States had helped foment the violence in his country are "false and baseless," Goldberg said in September, and Morales "insulted us."

The DEA has not been officially notified of any suspension or expulsion, spokesman Garrison Courtney said Saturday. He would not say how many agents are in Bolivia for security reasons but said it was not a significant presence.

"If this is true, it is an unfortunate situation," Courtney said. "We've been working with our counterparts for over 30 years and have a tremendous working relationship with our Bolivian counterparts."

The violence broke out in September as Morales, the nation's first Indian president, battled an autonomy movement in the natural gas-rich eastern departments of Santa Cruz, Pando, Beni and Tarija. The movement was triggered by Morales' pledge to redistribute wealth from the eastern departments to the country's poorer highlands.

Some of Latin America's leaders have supported Morales. Venezuelan President Hugo Chavez, long a critic of Bush and the United States, expelled the U.S. ambassador from Caracas in solidarity with Bolivia and recalled his own ambassador from Washington.

In late October, Bolivia's Congress approved an agreement between the government and opposition leaders to hold a referendum on a constitution that would grant more power to the nation's Indian majority, according to the Bolivian Information Agency, or ABI, the state news agency.

To spur the negotiations, ABI reported, Morales agreed to seek only one more term as president.

The agreement followed weeks of negotiations between the government and political opponents, including the governors of the eastern provinces. >>>> 

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

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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.

Carlos Quiroga