Chile says spy claims 'offensive'

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Chile's President Michelle Bachelet has responded angrily to claims by Peru's leader that Santiago was involved in spying on its neighbour.

Mrs Bachelet described as "offensive" Alan Garcia's remarks, in which he accused Chile of "repulsive acts".

Peru has arrested one of its own air force officers and accused him of passing secret information to Chile.

Peru said it was turning evidence of spying over to the Chilean government and wanted a full explanation.

After the spying scandal erupted at the weekend, Peruvian President Alan Garcia cancelled a scheduled meeting with Mrs Bachelet at the Apec summit in Singapore, and announced he was returning to Lima a day early to deal with the case.

On Monday, he said Peru's sovereignty had been violated and that the incident had put Chile "in a very bad light before the world".

Mrs Bachelet, speaking in Santiago, described Mr Garcia's attack as "offensive and pompous" and said it did nothing to help co-operation between the South American neighbours.

The spying scandal is the latest in a long series of diplomatic spats between the two countries.

They have been mired in a border dispute since the late 19th Century, when Chile defeated Peru in a war and annexed some of its land.

They also disagree on their maritime border, and are seeking a resolution in the International Court of Justice in The Hague.