LIMA, Peru (Reuters) -- Peru's President Alejandro Toledo on Monday scrapped the country's intelligence agency after a spate of scandals that cost seven agency chiefs their jobs within three years.

In a surprise late-night announcement, Prime Minister Carlos Ferrero said Toledo had ordered the National Intelligence Council, or CNI, closed and had given experts 90 days to come up with an alternative.

The decision came after it emerged that the government's new pick to lead the agency -- only announced two days ago -- was being investigated on corruption charges.

Lawmakers and analysts said the choice of former navy chief Ricardo Arbocco, who was out of a job before he even had time to move into his office, proved the unpopular government's continued ineptitude.

"The president has today ordered the total deactivation of (the CNI), so it will be deactivated and its headquarters closed and moved according to what the special commission recommends," Ferrero said.

The government named Arbocco as CNI head after his predecessor, Daniel Mora, quit on Thursday following accusations by Interior Minister Fernando Rospigliosi that the agency was plotting to oust him.

The CNI is the successor to the notorious National Intelligence Service, or SIN, used during the 1990s by former spymaster Vladimiro Montesinos to hound opponents of President Alberto Fujimori.

From scandal to scandal
The agency was supposed to have been overhauled. Instead, it has reeled from scandal to scandal.

Arbocco, a retired vice admiral, is being investigated because he was on the board of a military pension fund in the mid-1990s that is accused of selling a plot of land for $5.4 million over the market price, state anti-corruption lawyers say. Arbocco was unavailable for comment on Monday.

Mora lasted just six months. His predecessor was replaced after a scandal over state-sponsored spying on journalists.

The one before that quit amid allegations he was involved in government attempts to control media. He is now in jail awaiting trial after a tape surfaced in January in which he was heard discussing bribing judges with a Montesinos henchman.

Toledo, whose approval rating stands at just 9 percent, is struggling to rebuild his credibility after a string of influence-peddling scandals cost the jobs of four ministers and his vice president.

"Toledo's government has become an endless chain of ineptitude and scandals," Peru.21 newspaper said in an editorial that questioned whether the government could last until the end of its term in 2006.

Copyright 2004 Reuters.