(Adds denial of accusations in paragraph 8)

By Hugh Bronstein

BOGOTA, Oct 4 (Reuters) - President Alvaro Uribe's cousin and 30-year political ally Mario Uribe quit Colombia's Senate on Thursday to avoid a judicial investigation into whether he colluded with right-wing paramilitary death squads.

The move deepens a scandal in which 14 members of Congress, most of them in the president's coalition, are jailed awaiting trial for suspected links to the drug-running militias formed in the 1980s to help beat back leftist rebels.

And it could complicate Colombia's effort at clinching a free-trade pact with the United States, where Democrats on Capitol Hill are examining the conservative president's human rights record.

By stepping down from the Senate, Mario Uribe is protecting himself from an investigation by the Supreme Court, which probes public officials and does not allow appeals of its decisions.

He still faces questions from Colombia's attorney general about his relationship with ex-paramilitary warlord Salvatore Mancuso and real estate deals in which he is facing accusations of buying properties at below-market prices after the previous owners were forced to sell by paramilitary thugs.

Mancuso, now in prison, says Mario Uribe asked him to support his 2002 Senate campaign.

"This is a heavy blow for the Uribe clan," said Mauricio Romero, political science professor at Bogota's Javeriana University. "It is looking more and more like President Uribe and allies such as cousin Mario won office in 2002 with paramilitary support."

The former senator from Medellin denies any wrongdoing but his lawyer, contacted by Reuters, declined to comment on the specific allegations. The attorney general investigation was opened in July.

Thousands are killed in Colombia's guerrilla war every year as Marxist guerrillas fight government troops.

Most paramilitaries have disbanded under a peace deal promising reduced prison terms. But thousands of former "paras" have joined a new generation of Colombian crime gang specializing in extortion and cocaine smuggling.

Twenty-seven candidates plus scores of officials and campaign workers have been murdered ahead of Oct. 28 local elections. The government says the rebels and new crime gangs are behind most of the killings.

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