MEXICO CITY, July 26 (Reuters) - Mexico will use $206 million confiscated in what officials call the world's biggest drug cash seizure to fund programs for addicts and strengthen the justice system, the government said on Thursday.

The cash, found by police in March at a suspected methamphetamine kingpin's Mexico City mansion, was not claimed within a 90-day legal limit and now belongs to the government, Attorney General Eduardo Medina Mora said.

"The resources have been credited to the accounts of the judiciary, the attorney general's office and the health ministry," Medina Mora told reporters.

Mexico and the United States have described the haul as the world's biggest drug cash seizure.

On Monday, the United States arrested Zhenli Ye Gon, the Chinese-born Mexican whose house the money was found in. The cash, mostly in U.S. dollars, was found stuffed behind false walls and in closets.

Ye Gon, arrested in the Washington suburb of Wheaton, Maryland, is suspected of illegally importing huge quantities of pseudoephedrine through Mexican ports for sale to laboratories making crystal meth, or methamphetamine.

He accuses the Mexican government of setting him up, and has said the stacks of money in his house were forced upon him by associates of President Felipe Calderon during last year's election campaign.

The government denies the accusations and has called for Ye Gon's extradition.

The money will be used to pay for rehabilitation programs for drug addicts and to modernize police buildings and bolster Mexico's judiciary, which often struggles to bring powerful drug dealers to trial.

Calderon has sent thousands of troops to combat drug cartels, which have killed around 1,400 people this year in a turf war.

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