The US government rejected the accusations as "absurd" and warned that an end to US-Bolivian cooperation would only result in increased violence and drug trafficking.
"From today all the activities of the US DEA are suspended indefinitely," the Bolivian leader said in the coca-growing region of Chimore, in the central province of Chapare, where he was evaluating efforts to combat drug trafficking.
"Personnel from the DEA supported activities of the unsuccessful coup d'etat in Bolivia," Morales said, referring to fighting in five of the country's nine departments in September that resulted in 19 deaths.
Morales said DEA agents had been "conducting political espionage to fund criminal groups" who aimed at "attacks on the lives of (government) officials, and the president himself."
He also directly accused DEA officials of disrupting government activities during the unrest in September by "funding civic leaders with the aim of sabotaging airports in eastern Bolivia ... to prevent visits from (government) officials."
"We have the obligation to defend the dignity and sovereignty of the Bolivian people," Morales said at the airport in Chimore, where an anti-drug base funded in the 1990s by the United States is located.
Morales did not say whether he would order DEA staff to leave Bolivia, as coca-growers have asked him to do. The growers had already forced officials of the US Agency for International Development to halt their operations in two provinces where the aid agency was seeking to help growers find alternatives to raising coca.
"We reject the accusation that DEA or any other part of the US government supported the opposition or conspired against the Bolivian government," US State Department spokesman Karl Duckworth told AFP.
"These accusations are false and absurd and we deny them. We value our relationship with the Bolivian security forces in combatting narcotics production and trafficking," he said.
"Should US cooperation be ended, more narcotics will be produced and shipped from Bolivia. The corrupting effects, violence and tragedy which will result will mainly harm Bolivia as well as the principal consumers of Bolivian cocaine in the neighboring Latin American countries, Europe and West Africa."
The US embassy in Bolivia has also denied that DEA and USAID were conducting political work in the country.
In Washington, the DEA reacted swiftly to the Morales announcement.
"It's an unfortunate situation and an unfortunate decision on his part," DEA spokesman Garrison Courtney told AFP.
He added that there had been dialogue for the past three months with Bolivian officials over the future of the agency's work in the country, and acknowledged that the DEA was initially asked to leave a forward operating base.
Courtney would not be drawn on whether DEA believed Morales ordered the suspension as a result of Washington placing Bolivia on a blacklist of drug-transit or drug-producing countries in mid-September for failing to live up to their obligations to battle the narcotics trade.
"We have had a great working relationship with our counterparts there for over 30 years," he said.
President George W. Bush had written in a finding released September 16 that Bolivia joined Myanmar and Venezuela, which were already on the list in 2007, as countries that "failed demonstrably" in that regard.
Just five days before Bush put Bolivia on the blacklist, Morales had ordered the expulsion of the US ambassador, Philip Goldberg, after accusing him of encouraging division in the country by backing opposition figures.
In a briefing before leaving La Paz, Goldberg warned that Bolivia, which receives 100 million dollars a year in US aid to anti-drug efforts, could expect "serious consequences" for starting a diplomatic row with the United States.
Morales, Bolivia's first indigenous president, has served as the leader of the Bolivian coca-growers union. The coca plant, from which cocaine is derived, has many uses in traditional Andean culture.
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