(Recasts with arrest of Interpol chief, changes dateline)

MEXICO CITY, Nov 18 (Reuters) - Mexico arrested its head of Interpol on Tuesday for allegedly working for a powerful drug cartel and sent the military to take over police duties in the city of Tijuana in another step to flush out corrupt law enforcement.

Ricardo Gutierrez was Mexico's representative to Interpol, the world's largest international police force, and the latest top police officer to be locked up on suspicion of working for drug traffickers.

In October, two leading anti-drug agents were jailed for taking bribes of "up to $450,000 a month" from the Beltran Leyva crime group to leak intelligence about police operations.

The Beltran Leyva brothers recently split from the Sinaloa drug cartel run by Mexico's most wanted man, Joaquin "Shorty" Guzman, and also were bribing Gutierrez, prosecutors said.

Widespread corruption among Mexico's badly paid police is undermining President Felipe Calderon's army-backed war on drug gangs, which has claimed more than 4,300 lives this year.

Police corruption forced Calderon to turn to the army, which is seen as less corrupt, when he launched an all-out crackdown on violent cartels after taking office in 2006.

TIJUANA POLICE PURGED

Troops removed 500 local police and took over law enforcement in the violent U.S.-Mexico border city of Tijuana on Tuesday.

Army chiefs suspended a quarter of the municipal police force and soldiers and naval officers began patrolling some of the city's most dangerous areas, the army said.

"Those who are working for the other side are being kicked out," Lt. Col. Julian Leyzaola, Tijuana's police chief, told Reuters, referring to police officers who boost their income by working for drug cartels on the side.

The army aims eventually to suspend the remaining 1,500 officers and gradually rid the Tijuana force of corrupt police, Leyzaola said without giving a time frame.

In Tijuana, endemic police graft is so bad that some officers openly work as hitmen for drug gangs.

The military took over the command of Tijuana's police last year when Calderon sent in hundreds of troops to briefly disarm local police and patrol streets with federal forces.

But Monday's suspension is the biggest purge so far in Tijuana, where drug hitmen have killed some 210 people, including children, in the past month.

The city, across the U.S. border from San Diego, was once a freewheeling party town serving Americans tequila, sex and cheap medicines. But tourists have fled as drug war violence has spiraled out of control, with bodies sometimes dumped in acid or set on fire. (Reporting by Anahi Rama in Mexico City and Lizbeth Diaz in Tijuana; Editing by Bill Trott)

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