(Adds Venezuela statement)

By Hugh Bronstein

BOGOTA, Feb 1 (Reuters) - The boss of Colombia's biggest remaining cocaine cartel was shot dead in neighboring Venezuela in an apparent settling of scores among drug gangs, authorities said on Friday.

The discovery of the bullet-riddled body of Wilber Varela, known as "Jabon" or "Soap," on Wednesday near Colombia's border will likely fuel U.S. criticism that Venezuelan President Hugo Chavez has let his country become a safe haven for drug smugglers.

"We are working with Colombia to turn over the body," said Venezuela's anti-drug chief Col. Nestor Luis Reverol, who said the body's fingerprints matched those of the wanted cocaine king.

Varela, a former police sergeant sought for extradition by the U.S. government for smuggling tonnes of cocaine to the United States, was one of the last Colombian drug kingpins at large after last year's arrest of Diego "Don Diego" Montoya.

Varela was found dead next to the corpse of one of his bodyguards at a hotel in Venezuela's Merida state.

Colombia has received billions of dollars in U.S. aid aimed at cracking down on the drug trade but leftist Chavez has kicked U.S. anti-drug teams out of the country, saying they were working against his self-styled revolution.

"I think it is about time to face up to the fact that President Chavez is becoming a major facilitator of the transit of cocaine to Europe and other parts of this hemisphere," John Walters, director of the U.S. Office of National Drug Control Policy, told Reuters earlier this month.

Chavez dismisses those accusations as part of an "imperialist" plot to discredit him.

Reverol said Venezuela had extradited accused trafficker Luis Ramon Guerra to the United States after he was captured with help from the U.S. Drug Enforcement Administration, or DEA.

But he reiterated that Venezuela did not need to sign a cooperation agreement with the DEA in order to fight drugs.

Varela and Montoya had battled for control of the Norte del Valle cartel, a violent rivalry that left hundreds dead.

The U.S. government had offered a $5 million reward leading to the arrest of Varela, who got his nickname from a brand of soap with the same name.

The Norte del Valle gang, based near the western city of Cali, is the only Colombian cartel that still controls all areas of the business from cultivation of coca plants to production of cocaine and its exportation.

A mosaic of smaller drug gangs have taken the place of the once mighty cartels. Colombian cocaine exports remain steady at over 600 tonnes per year, according to the United Nations. (Additional reporting Ana Isabel Martinez and Luis Jaime Acosta; Editing by Eric Beech)

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