The discovery of a dozen decapitated bodies scattered across a city in Mexico has become the latest symbol of the terrifying price this country is paying for drug consumption in America.

Nine of the corpses were found on a busy street in Chilpancingo, an hour's drive from the tourist resort of Acapulco, yards from where the Governor of Guerrero state was later to participate in a religious procession.

A bag containing their heads, some gagged with tape, was found nearby, with a sign declaring: “For every one of mine you kill, I will kill ten.” Three more decapitated bodies were found later in a village outside the city.

Eight of the victims, some of whose bodies showed evidence of torture, were identified as soldiers from a local army base. “They are trying to scare the military,” the Defence Ministry said. Mexican security forces have suffered scores of deaths in the two years since President Calderón deployed up to 40,000 troops in a domestic war against drugs.

The number of people killed in Mexico through violence related to organised crime has doubled this year to 5,300 — more than the entire US death toll from the Iraq war — as cartels battle against each other for control of a $15 billion (£10 billion) annual drugs trade and ruthlessly murder those who fail to pay or are accused of betrayal.

The gruesome tactic of beheading is used to spread fear among the security forces and their informants. Two headless corpses were found on the same boulevard in Chilpancingo on December 7 with a note reading: “Soldiers who are supposedly fighting crime, and they turn out to be kidnappers. This is going to happen to you.”

A gunfight in October resulted in the arrest of Eduardo Arellano Félix, the head of the Tijuana cartel. Others, including the Sinaloa cartel, are now embroiled in a battle for control of the territory.

A particularly violent weekend last month resulted in 36 deaths in Tijuana, including nine men found decapitated — three of whom were policemen with their badges stuck in their mouths.

Lieutenant-Colonel Julián Leyzaola, who took over the city police department this month, said: “Even in war you don't see what you see here: people whose heads are cut off, people who are dissolved in acid. If the cartels understand only the language of violence then we are going to have to speak their language and annihilate them.”

Mr Calerdón said that the future of his country was at stake. “It is for this reason that my Government has not and will never negotiate with organised crime.” He added that it would “fight the enemies of Mexico with all the power of the State”.

On Tuesday last week the US Justice Department said that the Mexican drug cartels had become America's greatest organised crime threat. Those involved smuggled marijuana, cocaine, heroin and methamphetamine into the country, spreading violence across the border.

The National Drug Intelligence Centre, in its threat assessment, said that Mexican cartels already controlled distribution in most US cities and were gaining strength through street and prison gangs. They have funds of billions of dollars from recreational drug takers in the US and, to a lesser extent, Europe.

The Mexican Government is receiving $400 million in military assistance from President Bush under the Mérida initiative to combat the drug trade.

A recent report from the Brookings Institution in Washington, which was co-authored by the former Mexican President Ernesto Zedillo, said that the war on drugs — including the $5 billion Plan Colombia — had failed and would continue to fail as long as it emphasised law enforcement and neglected the problem of consumption. “If we insist only on a strategy of the criminal pursuit of those who traffic in drugs,” Mr Zedillo said, “the problem will never be resolved.”

The drug war is not only being paid for by Americans but is also being fought largely with weapons bought north of the border. When Patricia Espinosa, the Mexican Foreign Secretary, held talks on the Mérida programme last week with Condoleezza Rice, the US Secretary of State, she urged the US to take steps not only to curb the demand for drugs but also to slow the flow of guns into Mexico.

It is estimated that 2,000 firearms are being smuggled from US states such as Texas — where gun laws are notoriously lax — into Mexico every day.

Mr Calderón's Government has pleaded repeatedly for America to control the supply of automatic assault weapons. Mr Bush allowed a ban on these weapons to expire in 2004 as violence began to escalate in Mexico. Barack Obama has been criticised by groups such as the National Rifle Association for pledging to curb sales.

In her talks with Ms Espinosa, Dr Rice said: “I've never known illegal arms traffickers who cared very much about the law. And so I simply don't accept the notion that the lifting of the ban somehow has led arms traffickers to increase their activity.”

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