Ateke Tom, a Nigerian militant leader known as “the Chairman”, was proud of the chunky gold chain attached to a large Bambi hanging from his neck. “Do you like it? It is my favourite,” he said, placing it above a smaller cross hanging from a second chain.

With a swig of kai kai, a homemade palm gin more akin to rocket fuel, he returned to his favourite theme. “Yeah, I can cause chaos. It is easy for me, just a phone call to bring out the boys,” he muttered with a shrug of the shoulders as he played computer games on his mobile phone.

Like other gangs in Nigeria’s lawless oil-rich Niger delta, Ateke Tom has declared a temporary truce to taking hostages and attacking oil installations to allow Nigeria’s new Government a chance to broker a solution to the two-year crisis. But he, and they, are cautioning that if a deal is not struck swiftly they will make the whole area ungovernable, with huge ramifications for world oil prices.

Creating chaos has been Ateke Tom’s speciality. He cut his teeth helping a corrupt state governor to romp home in the country’s polls in 2003. His favoured methods were ballot rigging and intimidation.

They were days he remembers fondly. But then he and the new governor, from the ruling People’s Democratic Party (PDP), fell out over the spoils and he took to the oil-rich delta’s creeks with a band of well-armed followers.

From camps in the mangrove swamps he organised the kidnapping and ransoming of foreign oil workers and theft of oil from the network of rusting pipelines that crisscross the area. With the money he bought guns.

Ateke Tom claims to be in alliance with a host of other militant groups, many of which are criminal gangs. He is not a member of the main umbrella grouping, the Movement for the Emancipation of the Niger Delta (Mend), which is fighting for a better deal for the local Ijaw people, but claims to share its political programme. The gangs and militants often work together.

Better equipped than the state security forces, they are the real force in the sprawling region covering five of Nigeria’s thirty-six states, but rivalries between them also add to growing insecurity.

Two weeks ago at least five gang members were killed when fighting broke out over three British and four American oil workers who had been kidnapped. All seven were later released unharmed.

Over the past two years, Mend has kidnapped more than 200 foreign oil workers, attacked several oil installations and cut Nigeria’s oil output of about 2.5 million barrels a day by a third. Analysts now say that the delta is teetering on the edge of all-out chaos and conflict, even eliciting comparisons with the run-up to the disastrous Biafran War of 1967.

“Most of these kids in the gangs should be at school, they are meant to be the future of Nigeria, but they hang about and drink and smoke all day,” Damka Pueba, 32, a local human rights activist and community worker, said. “Here crime pays and they know it.”

However, the crisis is about much more than just a better share out of revenue. It is about how Nigeria, Africa’s largest oil exporter and home to an estimated 35 billion barrels of proven oil reserves, is governed.

Official statistics say that more than £220 billion has been stolen by corrupt politicians in the past 40 years. Mend claims that the Ijaw people have seen nothing but misery from more than four decades of oil exploitation. It is hard to disagree. The entire area is covered in oil spills. Much of the creeks are little more than foul-smelling cess-pits covered with a thin film of oil. Gas flares light up the sky next to villages with no power.

“They live in luxury while we have nothing,” said Morrison Tekedero, pointing at a house-boat for oil workers moored alongside an impoverished delta village a few miles from the second delta city of Warri.

The oil companies say they employ local people and finance scholarships and that the area’s security is a matter for the national Government. At the same time, they have often used practices such as continuous gas flaring, which creates acid rain, that would not be allowed in other countries. They have added to local rivalries through selective handouts.

The boys who have flocked to join gangs, like Ateke Tom’s Niger Delta Vigilante Movement, have few prospects. Schools, if they function at all, are badly equipped. Unemployment awaits those who do finish school.

This week Mend gave the new Government of Umaru Yar’Adua 30 days to respond positively to demands for a fairer shareout of “resource revenue”. But Mend itself is not averse to taking backhanders.

Others charge exorbitant fees to anyone wanting to visit their hideouts, leaving many to conclude that the movement has degenerated into yet another Nigerian scam, all be it one with legitimate greviance.

“Mend and the militants are a mixture of genuine activists, civil society, environmentalists, criminals and thugs. The problem with the delta is that nothing is what it seems,” said one expert on the region. “Remember, many of the gangs were created by local politicians who have now lost control of them.” President Yar’Adua knows that the success of his presidency hinges on how he handles the crisis in the delta. At his inauguration last week, he declared: “The crisis in the Niger delta commands our urgent attention. Ending it is a matter of strategic importance to our country.”

Activists worry that the Government may simply try to buy off the militants, many of whom will undoubtedly accept the money, to assure the international community, which has its eyes on proven oil reserves of 35 billion barrels.

When The Times visited Ateke Tom’s camp, a chest stashed with Nigerian bank notes arrived in another boat, a presumed reward for his truce declaration.

“This is the problem,” one NGO worker said. “The state government is frightened of the chaos the boys can cause, so they buy them off, but that creates more trouble between the gangs.”

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