Bolivian president Evo Morales has expelled the US development agency from his country for allegedly seeking to undermine his leftist government.

Morales claimed on Wednesday that the USAID is involved with "alleged political interference in peasant unions and other social organisations."

He made the announcement before a crowd outside the presidential palace during a May Day rally.

"Never again, never again USAID, who manipulate and use our leaders, our colleagues with hand-outs," Morales said in announcing the expulsion.

He then ordered David Choquehuanca, Bolivia's foreign minister, to inform the US embassy of his decision.

The move marks the latest confrontation between Washington and a bloc of left-wing governments in the Western Hemisphere.

Morales also told the crowd that he "laments and is condemning" secretary of state John Kerry's remark, made in April 17 testimony to the US Congress, that "the Western Hemisphere is our backyard. It's critical to us."

"It has too often been viewed as a second thought. It shouldn't be. It's our backyard, neighborhood, as you say. I think there are relationships we could improve," Kerry said.

Many Latin Americans, leftists in particular, are sensitive to descriptions of their nations as a "backyard," especially because of Washington's history of backing repressive regimes in the Americas.

In an interview with Al Jazeera, Philip Brenner, an international relations professor at the American University in Washington DC, said USAID became a target after its suspected role in encouraging secession in Santa Cruz, "a very wealthy part" of Bolivia.

Brenner said Bolivia's move signals to the US that "it does not have the same influence it used to have".."

Diplomatic expulsion

In 2008, Morales also expelled the US ambassador for allegedly aiding the opposition.

Morales is a close ally of Venezuela's left-wing government, which has seen its already strained relations with the United States deteriorate further in recent weeks. The government of president Nicolas Maduro, who won a tightly contested election last month to succeed the late Hugo Chavez, on April 25 detained a US citizen and accused him of destabilising the country.

USAID said in a statement it has spent nearly $2bn in Bolivia over the past 50 years on projects in education, health and food security, among other areas.

The US government "deeply regrets" Bolivia's decision, State Department spokesman Patrick Ventrell told reporters.

"Those who will be most hurt by the Bolivian government's decision are the Bolivian citizens who have benefited from our collaborative work," he said.

Ventrell said Bolivia's allegations against USAID were "baseless," and said the US government had not yet decided whether to take any action in response.

Brenner, however, told Al Jazeera that "there is little evidence" that USAID has helped a large number of Bolivians.

"I think the statement that we have helped them since 1964 is an overstatement," Brenner said, adding that Bolivia made gains on its own under Morales.