BUENOS AIRES, Argentina (Reuters) -- Argentina will banish exiled
                  Paraguayan coup leader Lino Oviedo to a remote part of the country, far
                  from Buenos Aires, for violating the terms of his asylum by making political
                  comments, an official said on Thursday.

                  The cashiered general was the strongman behind disgraced President Raul
                  Cubas. They fled Paraguay in March accused of plotting the murder of Vice
                  President Luis Maria Argana, their political rival. Argana was gunned down
                  in the street in Asuncion on March 23.

                  "Mr. Lino Cesar Oviedo has violated his asylum conditions by giving a press
                  interview of a political nature," Argentine Interior Minister Carlos Corach
                  told reporters. He will be "taken to his new place of residence in a very short
                  time."

                  Corach said this would happen in a few days. He would not comment on
                  reports that Oviedo's new place of exile would be on the Patagonian island
                  of Tierra del Fuego in the frozen far south, or on the vast, empty plains of La
                  Pampa province.

                  Paraguay wants Oviedo extradited to face murder charges and serve out a
                  10-year jail sentence for his 1996 coup attempt. Argentina has twice refused
                  to send him home for trial. It argues, as with neighbouring Brazil which
                  granted asylum to Cubas, that his return to Paraguay would destabilize the
                  country.

                  Landlocked Paraguay emerged from the 35-year dictatorship of Gen.
                  Alfredo Stroessner in 1989.

                  Though a partner of Argentina and Brazil in the Mercosur trade bloc, its
                  development is hostage to power struggles in the Colorado Party, which has
                  ruled for half a century.

                  The 55-year-old cavalryman, who has caused a row between Argentina and
                  Paraguay, appeared on the front pages of the press on Wednesday vowing
                  to be Paraguay's next president.

                  La Nacion quoted Oviedo saying, "If conditions arise for my return to
                  Paraguay, I can assure you I would beat the rest of them together in
                  elections, as already happened once before."

                  When Oviedo's coup failed in 1996 he turned to politics, founding his own
                  Colorado faction and winning party primaries in 1997. He was later
                  belatedly jailed for his revolt and his sidekick Cubas stepped in, won the
                  presidency and freed him.

                  Oviedo's lawyers denied he had given an interview, but Corach, who had
                  already issued Oviedo a "final warning" for carrying out political activities,
                  promised to investigate.

                  Members of the new government of Paraguay, led by President Luis
                  Gonzalez Macchi, accuse Argentine President Carlos Menem of sheltering a
                  killer. Menem denied reports that Oviedo is his friend, but acknowledges
                  that they have met.

                  Oviedo first found shelter in Argentina on the ranch of an associate of
                  Menem. He then moved to a rented chalet near Buenos Aires and has been
                  accused of hosting meetings there of up to 30 followers at a time, violating
                  asylum rules banning all political activity.

                  Diplomatic relations between Argentina and Paraguay, which have
                  withdrawn their ambassadors, still appeared sour on Thursday. Argentina
                  insisted Paraguay apologize for comments by Argana's son Nelson, now
                  defense minister, calling Menem "shameless."

                  "We are waiting for the government of Paraguay to honor its tradition and
                  our friendship and historic links by apologizing for the absurd, outrageous
                  comments by one of President Macchi's cabinet ministers," said Corach.

                  Macchi, asked in Asuncion for his reaction to news Oviedo would be
                  banished from Buenos Aires, responded, "Seeing is believing." He made it
                  clear he did not plan to apologize to Argentina. "We haven't yet and we are
                  not going to."

                     Copyright 1999 Reuters.