(Adds cholera hits camp) By Tim Cocks KAMPALA, Nov 9 (Reuters) - Ugandan rebel leader Joseph Kony has arrested his deputy on suspicion of spying but denies executing a man instrumental to peace talks, a mediator said on Friday. Ugandan media, quoting government intelligence sources, say Kony killed his second-in-command Vincent Otti about a month ago following a dispute over money and control. But Norbert Mao, a senior politician from Kony's home area, said he spoke to the fugitive head of the Lord's Resistance Army (LRA) by satellite phone at an undisclosed location in the remote forests of northeast Democratic Republic of Congo. "He told me Otti is not dead," Mao told Reuters. "He is only under house arrest because of a disagreement." Otti -- regarded as the brains behind the group in contrast to the volatile Kony -- was a prime mover behind the LRA joining peace talks that began last year in Juba, South Sudan, aimed at ending its 20-year insurgency. "There's a precedent ... Several senior commanders have been executed after falling out with Kony during the course of the rebellion," said Matthew Green, author of a forthcoming book on the LRA. "Any uncertainty about what is going on at the top levels of the LRA is cause for concern, given the kind of leadership struggles that have threatened to split the group in the past." In neighbouring Kenya on Friday, LRA spokesman Godfrey Ayoo said Otti was alive but declined to say when he last spoke to him. Otti and other LRA commanders had suffered from cholera in recent months but were recovering. "We have been appealing for proper shelter for more than a year," Ayoo said. "PARANOIA" Kony and Otti are wanted by the International Criminal Court (ICC) in The Hague for war crimes committed during their armed campaign against the government, which uprooted 2 million people in north Uganda alone and destabilised parts of Sudan and Congo. A truce was signed at the Juba talks in August 2006. But the LRA's top leaders have stayed hidden in Congo, fearing arrest if they show their faces. Mao, a key player at the negotiations, said Kony told him he believed his deputy was a Ugandan government spy. "I told Kony he needs to deal with this internal disagreement without too much recklessness," he said. Otti often spoke to mediators and reporters by satellite phone from his hideouts. But he fell silent in recent weeks and his various numbers went unanswered. LRA representatives at the Juba talks, mostly members of Uganda's Diaspora, toured the north of the country after a face-to-face session with President Yoweri Museveni in Kampala. The rebel delegates are meeting local leaders and visiting camps for villagers displaced by the war, where they are trying to win support for their bid to scrap the ICC arrest warrants. At his news conference in Nairobi on Friday, Ayoo said the rebel officials were welcomed everywhere. (Additional reporting by Daniel Wallis in Nairobi; Writing by Daniel Wallis; Editing by Robert Woodward)
