Anyone wanting evidence of how far the Indonesian armed forces have ceded control to the mobs will find it in the tourist resort of Lombok, the lush volcanic island adjoining Bali, where the capital, Mataram, was devastated in Muslim attacks on the property and churches of the Christian and Chinese minorities earlier this week.

There one can also find examples of how people of all groups are arming themselves as violence spreads throughout this vast Muslim archipelago with its Christian and Hindu minorities. Outside the Chandra Hotel on a main street in Mataram, for example, a group of about 20 cheerful but utterly determined Hindu youths in white headbands gathered every evening this week to protect their district from possible attack by Muslims.

Their armoury included curved parang knives, a sharpened bamboo pole stained red at the tip, and a line of home-made pikes. "If they attack us the whole place will go up," said their leader, expressing his lack of faith in the will or capacity of the Indonesian army to protect them.

The Christian minority in Lombok were for their part totally betrayed by the security forces. Nothing was done to stop the destruction of 18 churches and hundreds of homes, which began on Monday and lasted for three days. One church was beside an army barracks, another by a police station.

Only five of the 21 heavily-armed police stationed there (who take their orders from the army), were on duty when the mob arrived. "There was nothing we could do," said officer Fredik Pohan, "there were 500 of them."

But when the army decided, under pressure from moderate Muslim leaders horrified at the hatred unleashed in their previously tranquil island, that it was time to put a halt to the rampage, it did so quickly enough.

Soldiers shot dead three men looting a church on Asah Avenue on Wednesday evening, arresting 203 alleged rioters and a number of what the Indonesian newspapers call provocateurs.

Provocateurs are now blamed by the Indonesian media for every outburst of unrest, and are widely suspected of being members or supporters of the Old Order, as people call the regime of former dictator President Suharto. The media in Sulawesi on the main island of Java reported this week the apprehension of a military officer after one of the mysterious "ninja" killings of Muslim preachers, which have provoked rural people into forming armed vigilante groups in southern Java.

Many observers, like the Catholic bishop of Malaku province, Mgr Petrus Mandagi, firmly believe the intrigue is orchestrated. "The root of the conflict is a power struggle," he was quoted as saying. The governor of Malaku, Saleh Latuconsina, is convinced "the whole tragedy has become part of a national chess game". The conduct of the armed forces in Lombok this week led the Communion of Churches in Indonesia to criticise the security forces for slowness and lack of authority in the face of "premeditated and systematic" violence.

According to yesterday's Far Eastern Economic Review, the government of President Abdurrahman Wahid received intelligence reports of military involvement in this week's violence in Lombok. It said the reports named two former senior officers from the Indonesian Special Forces as being present when the orgy of destruction began after a Muslim rally, and described efforts to jam field radio communications among marines, infantrymen and police mobile brigades.

None of this will be news to the government. A week ago Mr Wahid warned of "evil hands" at work stirring up trouble and said the patience of the government was coming to an end. "If those people who are always seeking to put out life into disarray do not come to their senses we will take resolute action."

This assertion assumes the almost-blind leader of Indonesia has full control over the nation's security apparatus, but this is not certain. In Indonesia the armed forces have long operated as a parallel authority to the government, and today many military leaders, smarting over their humiliation in East Timor, might see their best interest served by undermining Indonesia's first democratic and pro-reform government.

The list of provinces and cities which have suffered revolt and unrest grows ever longer each month: Aceh, Irian Jaya, Riau, Jakarta, North and South Sulawesi, Ujung Pandang the Moluccas, Ambon, and now Lombok.

The military may, as its apologists insist, be traumatised and divided after the events of last year and simply unable to cope with the tensions unleashed after 40 years of dictatorship, but by failing to restore peace, it is achieving three objectives.

It is putting pressure on Mr Wahid not to press ahead with the prosecution of senior army officers for human rights abuses, specifically in East Timor and Aceh; it is undermining the former opposition leader and now vice-president, Megawati Sukarnoputri, who has been given responsibility for ending the unrest in the Spice Islands, where a year of Christian-Muslim violence has cost at least 750 lives and displaced 200,000 people; and it makes the point that the military will become indispensable in preventing the country from disintegrating. Speculation of a creeping coup by the generals reached such a pitch eight days ago that the United States, with its access to sensitive intelligence on Indonesia, warned the military to call off plans to overthrow the government and accused the generals of thwarting progress. "A huge struggle is continuing on all fronts between the forces of progress, the future-oriented democratic forces of President Wahid and the Indonesian military," said the US Ambassador to the United Nations, Richard Holbrooke.

In these circumstances the EU's decision to lift the ban on arms sales to the Indonesian military this week has been greeted with dismay by Indonesian human rights campaigners and some of Mr Wahid's ministers.

British Aerospace can now resume delivery of 16 Hawk ground attack jetfighters and the British company Alvis will be sending 50 Scorpion armoured vehiclesto generals whose every military campaign has been directed at suppression of internal revolt or dissension.

The ban on arms sales was imposed in September when Indonesia became almost an international pariah over the behaviour of the military in East Timor. EU government officials say since then Indonesia has acquired a democratic government and a new president, but few doubt that the army remains a powerful force resistant to democratic control.

Mr Wahid, a moderate Islamic leader, and the former armed forces commander, Gen Wiranto, are engaged in a high-stakes face-off in the cabinet, with the president threatening to sack him as co-ordinating minister for the armed forces if he is found guilty of abuses in East Timor by a government inquiry.

The EU's action this week contrasted unfavourably with that of the United States, which held out the promise of billions of dollars in international funds for Indonesia in return for a serious commitment to long-overdue economic and political reforms. It got this in Mr Wahid's first budget on Wednesday, which relies heavily on foreign loans to rebuild the economy.

This is his strongest card in a deadly struggle. At stake in Indonesia are no less than the democratic gains of the last two bloody years, which include free elections, freedom of the press, action against corruption, the ascendancy of civilian power and the rule of law in the world's third largest democracy.