By Andrew Beatty

PANAMA CITY, Aug 28 (Reuters) - A U.S. judge's decision to extradite Manuel Noriega to France has denied Panama the chance to hand justice to the former strongman for killing opponents, including one who was beheaded, during his rule in the 1980s.

Noriega, captured by U.S. forces who invaded Panama in 1989, will be sent to France to face money-laundering charges after his term in a U.S. prison ends next month, U.S. magistrate William Turnoff ruled on Tuesday.

Now aged 73, Noriega was sentenced in absentia in his homeland for the 1985 beheading of outspoken critic Hugo Spadafora and for the killing of nine soldiers who tried to topple him in 1989.

"Here, there are many people still in pain. The families of those who were murdered and the disappeared. We cannot leave history open like this," said Guillermo Ford, a veteran opposition leader.

Noriega has a 20-year sentence hanging over him in Panama, but he may have been allowed to serve it under house arrest because he is over 70.

The government of President Martin Torrijos says it still wants to bring Noriega to justice but some Panamanians were relieved he will not be sent home where he could open old wounds.

"If he comes to Panama he is not going to serve his sentence. He has contacts here in the government and many things could happen. At the end of the day, he is not going to pay for what he has done here," said Ester, a market researcher in the capital.

Noriega remains a divisive figure in Panama, loathed by some because of his brutal rule, but popular among the working class for challenging Panama's European-descended elite, who dominate political life here.

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Few believe justice system could handle a high-profile and difficult prisoner like Noriega in Panama where wealth and political connections can often corrupt justice.

"The only ones who are in prison are the poor," said Santiago Torres, a resident of Panama City.

Critics point to Panama's Public Works Minister Benjamin Colamarco as the embodiment of enduring links between Noriega and the current government.

Colamarco was a commander in Noriega's "Dignity Battalions," a paramilitary force accused of some of the most flagrant human rights abuses during the dictatorship.

Mario Rognoni, a long-time friend of Noriega, accused the ruling elite of making a political deal with France and the United States to avoid Noriega's return. He denied that Noriega has links to the current government.

"He was never a politician. He was a soldier," said Rognoni.

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