Mexican authorities displayed in public a top drug lord on Tuesday whose arrest this week they hope will mark a breakthrough in President Felipe Calderon's bloody campaign against powerful cartels.

Edgar La Barbie Valdez, a Texas-born 37-year-old, held back a smile as he was led handcuffed by masked federal police before reporters, flanked by fellow suspects, sophisticated weaponry and plastic packages of drugs.

Wearing a green polo shirt, jeans and sneakers, Valdez, nicknamed La Barbie for his fair complexion, grinned openly as authorities discussed his capture outside of Mexico City on Monday evening.

He has been detained, and this operation closes a chapter in drug trafficking in Mexico, senior federal police official Facundo Rosas later told local broadcaster Televisa.

It is unclear whether Valdez' arrest, Calderon's second coup this year against cartels, can staunch rampant drug violence that threatens Mexico's image as it struggles out of recession and seeks to hold on to tourist revenues.

Over 28,000 people have died since Calderon launched his crackdown in late 2006, and bloodshed shows no sign of stopping as rival gangs battle for control of smuggling routes.

Authorities said Valdez, a leader of the Beltran Leyva cartel based in central Mexico, trafficked a tonne of cocaine each month and was responsible for several dozen murders.

His arrest follows an operation in July that killed Ignacio Nacho Coronel, No. 3 in the rival Sinaloa cartel.

But similar operations in the past have at times intensified bloodshed as subordinates battle for control of drug gangs that are believed to net up to $40 billion a year.

Violence has begun to bleed beyond traffickers and security forces as cartels target mayors and migrants making their way through Mexico to the United States.

Valdez had been a leading contender to head the Beltran Leyva cartel since soldiers killed its former boss, Arturo Beltran Leyva, in December 2009.

The investigation has not been concluded ... and at this stage it is not clear who could replace him, Rosas said.

Authorities sidestepped questions about whether Valdez, who Rosas said had U.S. and possibly Mexican citizenship, would be sent for trial to the United States, where there is a $2 million price on his head.

Born into a middle-class family in Laredo, Texas, Valdez is said to have played American football at school and developed a taste for luxury cars and nightlife before coming to Mexico to work with drug cartels.

Valdez, who did not make any statements and was led into an armored vehicle at the end of presentation, has already provided some information to authorities, Rosas said.

(Editing by Jackie Frank)