QUITO, May 10 (Reuters) - Ecuadorean President Rafael Correa should reconsider his refusal to extend the lease on an air base used by the U.S. military to help catch drug runners across South America, a senior U.S. diplomat was quoted as saying on Thursday.

The U.S. military says surveillance flights from the Manta base on the Pacific coast are responsible for more than half of all South American drug seizures.

"It helps protect the sovereignty of Ecuador, which is violated by drug kingpins," U.S. Deputy Secretary of State John Negroponte told "El Comercio" newspaper on Wednesday during a visit to the poor Andean country.

"We are hopeful that whatever the final decision, (Ecuador) considers the cost benefits of the presence of the base," he added.

Washington has invested $71 million in the port city of Manta, where an economic boom has been fueled by high-spending U.S. servicemen.

Correa, a popular leftist economist, has promised to cut off his arm before extending the lease that ends in 2009. He has called U.S. President George W. Bush a "dimwit" but hailed him as noble for congratulating him on his election last year.

Correa, an ally of U.S. antagonist President Hugo Chavez of Venezuela, has also worried Washington with pledges to limit foreign debt payments, rework oil deals and scrap any free trade deal with the United States, its main trading partner.

Sandwiched between Colombia and Peru, the world's top cocaine producers, Ecuador has turned into a key transit point for U.S.-bound illegal drugs.

During Negroponte's visit on Wednesday, Correa asked the United States to extend a preferential tariff system that aims to discourage illicit drug crops in the region.

Some Ecuadorean politicians and critics of the Manta base said the U.S. military uses the base to help the Colombian government battle leftist rebels waging a four-decade-old war fueled by drug smuggling revenues.

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