Contreras, who was the second most powerful and feared figure in Chile's 1973-1989 military dictatorship after Pinochet himself, died overnight in a miltary hospital in the capital, Santiago.

He had been in hospital since September with kidney problems, and suffered additionally from diabetes and cancer.

Dozens of people gathered outside the hospital after his death was confirmed by prison officials, waving Chilean flags, making champagne toasts and chanting "Murderer!"

Contreras formed and commanded the DINA spy agency, which was set up after a 1973 military coup led by General Pinochet which ousted the socialist government of President Salvador Allende.

Thousands killed

DINA is blamed for the kidnap, torture and murder of thousands of people during the dictatorship. The Chilean government estimates that 3,095 people were killed, including about 1,200 who forcibly "disappeared."

Under the regime of terror, Santiago's national football stadium was converted into a detention center where hundreds of people were held and tortured.

Contreras was jailed in 2005 after being sentenced to 505 years imprisonment in a number of trials. At the most recent one, in May, he was handed a 15-year jail sentence for his involvement in the murders of actress Ana Maria Ortiz and political scientist Alejandro de la Barra at the end of 1973.

Although Contreras was a close confidant of Pinochet early on, the two men quarreled in their later years, with Contreras accusing his former boss of trafficking drugs to Europe, while the former dictator blamed the ex-spy chief for committing the worst abuses under his rule.

Pinochet himself avoided trial on the grounds of poor health, dying in December 2006.

In an interview in 2013, Contreras showed himself to be unrepentant, claming that all those who diappeared during the Pinochet dictatorship were armed leftists killed in gunfights.

tj/jlw (AFP, AP)