By Simon Gardner
LA RUANA, Mexico (Reuters) - A vigilante leader in a Mexican state torn by violence said on Wednesday it would be better to kill the heads of the region's dominant drug cartel than arrest them, and rejected a government order to disarm.
Vigilantes have been battling the Knights Templar cartel in the western state of Michoacan for almost a year, creating a major security problem for President Enrique Pena Nieto.
Federal security forces have turned a blind eye to the armed vigilantes despite calling on them to disarm.
Reuters reporters saw police and army convoys steadily drive past sandbag roadblocks manned by members of Michoacan's so-called self-defense groups.
Some farmers in this impoverished, rugged region of lime and avocado plantations, marijuana fields and crystal meth labs say the Knights Templar have murdered and extorted locals for years.
"It may sound ugly to say kill them, but if it happened it would be for the best," Hipolito Mora, a 58-year-old farmer turned vigilante leader, said in an interview at a small ranch in the village of La Ruana, deep in Knights Templar territory.
"If they are not killed, they should be put in jail. (The government) should put an end to this murderous organization and leave us to focus on our work."
Interior Minister Miguel Angel Osorio Chong this week ordered the vigilantes to lay down their weapons, but Mora and other vigilantes refuse. Some have warned of a massacre if the government tries to disarm them by force.
"I don't know how we'll react," he said from beneath a cowboy hat, a wallet emblazoned with a picture of Daffy Duck dangling around his neck. "I hope they don't try, and that they help find the Knights Templar leaders soon."
"We ask them not to interfere with us, don't bother us, we have been doing their job for some time. Let them first disarm the Knights, detain them, and then we'll lay down arms."
Osorio Chong said on Wednesday the government had three leaders of the Knights Templars in its sights.
Fronted by a former school teacher, the Knights Templar is a cult-like group that styles itself on the medieval military order that protected Christian pilgrims during the Crusades.
The vigilantes range from a rag-tag assortment of farmers carrying basic weapons from machetes and side-arms to shotguns and AK-47s to others with apparent military training, crew-cuts and sophisticated weapons like gleaming Israeli assault rifles.
Asked to identify a group of a such gunmen accompanying him, Mora said: "They are police." But he declined to elaborate. The men said they had come from Mexico City.
Without meeting heavy resistance, the vigilantes that Mora says number in their thousands have occupied a host of towns in recent weeks where the Knights Templar held sway, encircling the gang's stronghold in the city of Apatzingan.
A convoy of hundreds of federal police and troops on Tuesday took control of Apatzingan, though there was no sign of any vigilantes. However sporadic violence continued on Wednesday.
Just after dawn, two gunmen entered a pharmacy two blocks away from the mayor's office, which was under guard by federal police, doused it in gasoline and set it alight.
"I think they were Knights Templar," said 21-year-old store attendant Maria Cisnes, who rushed back into the blazing pharmacy to rescue a colleague's child sitting in the back.
The tips of her eyebrows and ponytail singed by the flames, Cisnes was trembling as she recounted the ordeal. No-one was killed, but the blaze badly damaged the store, and a pungent smell of burning deodorants and medicine hung thick in the air.
The Knights have openly defied the government, putting out videos in the media and accusing the vigilantes of being infiltrated by other criminal gangs moving into Michoacan.
Mora denies there are any drug gang members in his ranks.
"I had some great offers from the Knights Templar ... to join them, but I'm not going to sell out," he said.
After admitting last summer the government had lost control of parts of Michoacan, Pena Nieto turned his attention to pushing economic reforms through Congress.
But increasing chaos in Michoacan has raised questions about Pena Nieto's security strategy, drawing him nearer to the vortex of violence that trapped his predecessor, Felipe Calderon.
"This is a real, important problem. It is an extraordinarily complex situation, and the government is taking decisive actions to restore order and governability of the state of Michoacan," Finance Minister Luis Videgaray said on Wednesday.
Calderon launched a military crackdown on the cartels by sending troops into Michoacan seven years ago. But although his government captured or killed many capos, violence intensified and over 80,000 people have since died in drug-related crime nationwide.
At least two people were killed on Monday night when troops clashed with locals trying to stop them from disarming vigilantes in Antunez, about 20 km (12 miles) from Apatzingan.
(Editing by Dave Graham and Eric Walsh)