A former head of a feared Colombian militia that was linked to more than 5,000 murders and a spate of disappearances has been arrested in Panama, Colombian police said.

Armando Perez, also known as Omega or Camilo, had been a leader of a bloc of right-wing paramilitary units and was hiding out in neighbouring Panama, said Rodolfo Palomino, the Colombian National Police chief on Friday.

Perez, who was also wanted by Interpol, was finally snared in a joint operation between the two countries after four years on the run. They did not disclose when he was arrested.

"There are 81 current arrest warrants out for Perez for crimes including murder, forced disappearances and other crimes against humanity," Palomino said to the AFP news agency.

He was also being hunted for his involvement in "massacres" between 1999 and 2000 in Tibu and La Gabarra, both in northeastern Colombia.

Perez, also known as "the monster of Catatumbo," was active too in Panama, coordinating shipments of drugs from Colombia to Central America and Europe.

He was the second-in-command of a paramilitary coalition known as the United Self-Defence Forces of Colombia or AUC.

Paramilitaries committed atrocities against civilians in their fight against leftist fighters.

Between 2003 and 2006 the Colombian government implemented a demobilisation process for dozens of armed groups that made up the brutal AUC.

Perez took part in the peace drive in 2004 but quit a year later and formed a gang dedicated to drug trafficking.