* South American nation has long history of jail violence
* Chavez government forms ministry to quell chaos
By Andrew Cawthorne
CARACAS, June 16 (Reuters) - The death toll has reached 22 in the latest riot by armed prisoners in Venezuela's violent and overcrowded jails, the government said on Thursday.
President Hugo Chavez's government announced this week a new Prisons Ministry to try to control chaos inside jails where inmates traffic drugs, carry guns, mastermind crime outside via telephones and control whole blocks by themselves.
"We acknowledge much work is needed and we lament this incident," Interior Minister Tareck El Aissami said.
Twenty-one inmates and one visitor died during weekend gunfights between gangs controlling two blocks at the Rodeo I prison in Guarenas town outside Caracas, El Aissami said, giving the latest official version of the incident.
Media and relatives say the real toll is higher, possibly closer to double that, with bodies still strewn around the premises.
"There are reasons to suspect more deaths," said Humberto Prado, who helps run the Venezuelan Prison Observatory non-government organization that tracks prison violence closely.
Rights groups say Rodeo was built for 750 people, but now holds 3,600, while at a national level Venezuela's 49,000 inmates are living in space intended for 13,000.
"It's a totally Dantesque situation," Prado said.
Activists say prisoners at Rodeo fought and shot at each other for about nine hours on Sunday without intervention from guards, while panicked families gathered outside.
Prison massacres are nothing new for Venezuelans and stretch back long before Chavez took office in 1999.
In perhaps the worst single incident, about 130 prisoners were burned or hacked to death with machetes during gang fights at Sabaneta jail in the western city of Maracaibo in 1994.
Last year, 476 inmates died in Venezuelan jails, according to the Venezuelan Prison Observatory, while 124 died in the first quarter of 2011 alone.
Brutal conditions in Venezuela's jails were also highlighted earlier this month with the arrest of two policemen accused of mistreating three inmates who died. [ID:nN02299377]
Although the socialist Chavez has announced numerous police shake-ups during his 12-year rule, cases of brutality and extrajudicial killings remain rife, rights groups say.
Last month, 11 policemen in the wealthy, opposition-run district of Chacao in Caracas were suspended after being caught on camera beating and kicking prisoners. (Editing by Eyanir Chinea and Peter Cooney)