By Tim Gaynor and Lizbeth Diaz

MEXICO CITY (Reuters) - Mexico has killed the leader of the brutal Zetas drug gang, the most powerful kingpin to fall in Mexico's 6-year-old battle against cartels, but his body was snatched from the funeral home by armed men, the Marines said Tuesday.

The Marines said fingerprint tests in a database confirmed that Heriberto Lazcano had been killed in a firefight with Marines in the northern state of Coahuila on Sunday afternoon.

Lazcano, alias "The Executioner," is the highest profile drug lord to be killed or captured in a military offensive against the gangs launched when President Felipe Calderon took office in 2006. The United States had a $5 million bounty on his head.

However, a local state prosecutor said Lazcano's body was snatched from a funeral home in northern Mexico by an armed group just hours after his capture. He did not elaborate.

Photographs published by the Marines showed the body of a man in a dark shirt stained with mud lying on a table, his face similar to mugshots of Lazcano, a former Mexico special forces soldier who defected to a cartel in the 1990s.

The Zetas, considered one of the two most powerful drug gangs in Mexico, have perpetrated some of the most violent acts in the country's drug war that has killed about 60,000 people during Calderon's term.

Lazcano was among two Zetas killed in a gunfight after attacking the Marines with grenades from a moving car in a ranch near the town of Progeso in Coahuila.

Lazcano, or "Z-3" is one of Mexico's most-wanted men. Only Joaquin "Shorty" Guzman, boss of the Sinaloa Cartel, would represent a bigger prize to the government.

(Reporting by Mexico Newsroom; Writing by Simon Gardner; Editing by Doina Chiacu)