Bolivian President Evo Morales has accused the US of acting against his government under the cover of fighting drug trafficking.
"There were DEA (Drug Enforcement Administration working under US Department of Justice) agents that were doing political espionage ... financing criminal groups so that they could act against authorities, even the president," Morales said on Saturday, Reuters reported.
The first indigenous President of the Andean nation suspended the activities of DEA in the coca-growing country.
"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 said DEA supported the opposition governors in Bolivia that once tried to topple his government.
"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 provinces in September that killed 19 people.
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.
Bolivia says it does not need US aid to deal with the problem.
Since taking office in 2006, Morales has pursued a policy of "zero cocaine but not zero coca," which gives permission to tens of thousands of farmers to grow coca on small plots for legal uses.
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 and as a way to adapt to high altitude.
Bolivia ranks third after Colombia and Peru as the world's largest producers of cocaine.