Berisha's forces on the run as rebels celebrate their gains

Government under fire: the first journalists into Albania's deep south witness a land and people on edge of anarchy

Gunfire rattled around the rebellious Albanian city of Vlore last night, as dozens of armed men loosed tracer rounds into the sky. They were not aiming at anything in particular, merely expressing their contempt for the government of President Sali Berisha in Tirana, for the unhappy troops dispatched to the area, supposedly to crush the uprising, and for the Shik secret police who may yet be lurking in Vlore.

The people's rebellion in southern Albania, sparked by the collapse of pyramid schemes used to fatten the coffers of Mr Berisha's friends, has reached a peak in Vlore, where 70,000-odd citizens expelled the authorities by force.

Law and order in the town is now haphazard, to say the least. Young men with guns looted from police and army barracks and wandered the town, firing relentlessly into the air.

But a crowd of perhaps 1,000 who had gathered yesterday afternoon to demand, again, that Mr Berisha step down and repay their money, clapped and waved as they saw our car drive past. We were the first foreign journalists to reach Vlore since Monday. "Thank you, thank you," said an elderly man, seizing our hands.

Life has not been easy in the town for those who prefer not to wield a Kalashnikov. Bread seems to be in short supply, though tales of looting and anarchy appear to have been exaggerated. The police station, town hall and Shik headquarters have been trashed, as have the offices of the pyramid operators, Vefa Holdings.

Military hardware, however, was up for grabs along the main road south of Vlore, where several barracks have seen overrun by anti-government protesters. Yesterday, young men, many masked, helped themselves to uniforms, assault rifles, even howitzers - while troops made little attempt to defend their possessions.

The demoralised Albanian army, overlooked by Mr Berisha in favour of the police force, seems to have little stomach for the fight that could become a civil war.

We journeyed across the invisible front-line into what is already being referred to as "rebel territory" very cautiously. Along a minor road leading west to this seaside town, a couple of armoured personnel carriers and police vans, manned by a handful of ragged soldiers, seemed the best the Albanian army could muster. They barred our way then, suddenly, announced that we could proceed.

The occasional rattle of automatic fire accompanied our hesitant journey across a wide river plain. We could not tell who was in control, but we knew they were shooting from the hills across the valley. One silhouette of a gunman appeared on the ridge, then another and another.

The warning fire was closer, but the rebels must have decided that no hostile force would have crawled along quite as slowly and openly as we did. The white handkerchiefs on sticks we waved out of the windows might have helped.

Once we had established our credentials they were very friendly, firing frequently into the air to express their delight. This raggedy, makeshift army has begun to organise its members into units, but has not yet adopted any military discipline.

The men said a boy had been killed the day before when panic broke out after a helicopter flew over the hills they are defending. But they seem determined to stand their ground.

"The president took all our money, and now there's a war," said Hoxha Kranar. Idris Nimet, another of the 200 or so fighters stationed in the hills, worked as a carpenter in Italy for five years and lost his life savings in a pyramid scheme.

"We're not rebels, like Berisha says. We're all types of citizens from Vlore, there is no distinction between the different parties, and we all want our money back."

The two sides had not exchanged much fire yet, Mr Nimet said. "They have not come yet because they are afraid - they know how well armed we are."

Perhaps too well armed - a nurse at the shabby hospital in Vlore said seven people had been killed by gunfire on Wednesday: four by the Shik and three in accidents.

At least 30 cars and three buses made the grim procession from the town to the wooded cemetery yesterday, burying the victims of an alleged Shik killing. Three men manning a barricade near Vlore were shot dead by gunman assumed to be secret police.

Fear of the plainclothes force, used by Mr Berisha to intimidate and repress political opponents, is widespread in Vlore, where citizens seem unsure of who is exactly in charge.

"We still don't know who is Shik and who is not," one young man said. "If they see me with foreign journalists they may kill me."

That is, if the stray bullets don't get him first.