`I am the mighty ruler of the Regions below the wind, who holds sway over the land of Aceh and over the land of Sumatra and over all the lands tributary to Aceh, which stretch from the sunrise to the sunset." This was the proud boast of the Sultan of Aceh in a letter to Queen Elizabeth I of England in 1585, which began a trade agreement between Aceh and England that lasted until the 19th century.

This exotic land lying at the tip of Sumatra island was then a wealthy nation, trading in spices, pepper, gold, ivory, tin, sandalwood, tortoise shell and camphor. It remained an independent trading entity until subdued by the Dutch in a 30-year war at the end of the 19th century.

Aceh was only reluctantly absorbed into the new state of Indonesia, formed after the war by the islands between the Pacific and the Indian Oceans which made common cause in fighting the Dutch colonists. It had its own history of statehood. It came earlier to Islam than other parts of Indonesia and always embraced a stricter Muslim lifestyle. It now wants out of Indonesia. As far as it is concerned, the post-war political unit formed from the world's largest archipelago has failed. It has been exploited and repressed.

Independence fever has seized the four million people of the lush, mountainous territory and Jakarta is panicking. If Aceh secedes, it could mean the disintegration of the world's fourth most populous nation. East Timor led the way, and the army unleashed by former President Suharto is now reaping the whirlwind sown by its 1975 invasion of the former Portuguese colony. Independence movements are growing stronger in other regions: Irian Jaya, southern Sulawesi, Ambon and Riau, all rich in oil, timber, copper and gold.

After years of repression the government in Jakarta is trying to keep the country together by killing home rule with kindness. President Abdurrahman Wahid has offered Aceh special autonomy. He has pledged to return 85 per cent of the wealth of the oil-and gas-rich province, rather than the 15 per cent envisaged in a new law for the provinces. Aceh accounts for a third of the liquefied natural gas produced by Indonesia, the world's largest supplier, but it gets little of the profits in return.

The Indonesian military, which fanned the flames of secession by terrorising the population, is pulling out 600 troops from the two territorial battalions which, with 1,700 paramilitary police, have been fighting the insurgents, and promising that those guilty of human rights abuses will be punished.

At the same time the leaders of the first democratically-elected Indonesian government are frantically trying to talk Aceh out of independence. Mr Amien Rais, head of the legislative assembly, arrived yesterday in the provincial capital, Banda Aceh, where on Monday half a million people demonstrated for a referendum which would allow them to chose between autonomy and independence. He warned: "time is not on our side; if Aceh breaks away we will break apart".

The Minister of Human Rights, Mr Hasballah Saad, the first Acehnese in the cabinet, will arrive today to try to defuse rising tensions with promises of investigations and prosecutions, and to prepare the way for a visit by President Wahid and Vice President Megawati Sukarnoputri to Banda Aceh later in the month to appeal personally to the people.

It has always been assumed by analysts that the end of dictatorship and bureaucratic corruption in Jakarta would lessen nationalistic tensions in Indonesia. But the establishment of the first "clean" reformist president has had the opposite effect. In opposition, President Wahid promised Aceh a referendum and the Aceh nationalists now see a historic opportunity to break free of Jakarta.

President Wahid has repeated this promise in office, saying: "The consequences of a referendum, whatever is the outcome, we will accept." But he has given no date for organising a poll and is under extreme pressure from his cabinet and the army to do no such thing, despite his - rather unconvincing - assurances that the people will opt for autonomy.

This issue could cause a dangerous crisis in relations between President Wahid and the armed forces, just at the time when Indonesia is about to reclaim its place as a major Asian power after being marginalised by its economic and political crises. But military suppression of Aceh is equally unthinkable. It could end up in a bloody protracted war like that between Sri Lanka and the Tamil Tigers.

Aceh's proud and independent people, a blend of Indonesian, Arab, Tamil, Chinese and indigenous groups - among whom are found the tallest people in Indonesia - have a reputation for fierce resistance. When the Dutch returned to Indonesia after the second World War, they did not even try to reoccupy Aceh, knowing it would be too costly. After it was dissolved as a separate Indonesian province in 1951, its self-styled military governor, Daud Beureu'eh, led a nine-year campaign to turn Aceh into an independent Islamic state. It was ended by what turned out to be false promises of autonomy.

A new rebellion began on a small scale in 1989. The Aceh Merdeka (Free Aceh) Liberation Front had only a few hundred guerrillas, many trained in Libya. It was crushed within three years by the army, but only through summary executions, internment without trial, forced confessions and torture, which alienated the people.

"My hair and my nose were burned with cigarette butts. I was given electric shocks to me feet, genitals and ears until I fainted," testified Acehnese journalist Adnan Beuransyah at his subversion trial in 1991. A favourite tactic of the military was to dump Acehnese corpses at the side of the road. Human rights groups say as many as 2,000 Acehnese were brutally killed. The counter-insurgency campaign was wound down in 1998 but disappearances and burnings by the military continue to this day.

Unlike the East Timorese guerrillas, who had limited supplies of arms, the Free Aceh fighters, with financial aid from wealthy Acehnese sympathisers abroad, have obtained modern weapons such as AK-47 assault rifles smuggled from Cambodia through Thailand and Malaysia, the same route used by Tamil Tigers and Muslim guerrillas in the southern Philippines.

In Aceh today one hears little of the appeals for reconciliation which East Timor Falintil leaders employed from a position of weakness. Here the guerrilla leaders talk tough. The prospect of dialogue between Jakarta and Aceh, suggested in a letter sent him this week by President Wahid, was dismissed this week as "stupid" by the exiled Free Aceh leader, Mr Tengku Hasan di Tiro, who lives in Stockholm and claims his guerrilla army is now 5,000 strong.

"We don't need it, we are independent," said the 72-year-old heir to the sultan who once petitioned Her Brittanic Majesty. "Indonesia will become at least five different countries. The first two (East Timor and Aceh) will go and the rest will follow, absolutely."

On the ground the guerrilla commander, Mr Abdullah Syafei, told reporters at a base near the town of Sigli that the change of government in Jakarta had no impact on their drive for independence. "The President is a liar," he said. "All his promises are just lies. There can be no negotiations with Indonesia whatsoever."

Jakarta has no doubt undermined its credibility since the fall of Suharto by making and breaking promises. The armed forces last year apologised for past abuses in Aceh and said all combat troops would be withdrawn, but little changed. President B. J. Habibie undertook when he visited Banda Aceh in March that the army's past abuses would be fully investigated and the perpetrators punished. Nothing happened. Indeed the then-armed forces chief, Gen Wiranto, told parliament that investigations of abuses in Aceh could open the floodgates to similar grievances left over from former President Suharto's regime and undermine military morale.

In April the government pushed through laws allowing for local autonomy and decentralisation, but any hopes of mollifying the people were dashed when troops fired on a crowd near the industrial city of Lhokseumawe, killing at least 45 people. The Indonesian government cannot say it has not been alerted to the consequences of foot-dragging and broken promises. Months ago prominent Aceh moderates like publisher Surya Paloh were warning that if the government mishandled the situation, it could be confronted with a "second Mindanao" - the rebellious island where the Philippine government has been fighting Muslim insurgents for more than 30 years. "The difference between the past and the current situations is that Aceh Merdeka now has the support of the people," he said then. "Before, it was only supported by the ule-mas [Muslim preachers]."

Jakarta is desperately trying to keep the lid on Aceh. The President is keeping alive the hopes of a referendum and the Minister of Human Rights has promised that anyone named by a government-sponsored committee assigned to probe atrocities will be brought to court this month.

But foreigners are starting to leave, fearing widespread violence. Mobil Oil Indonesia, which part-owns the Arun gas processing plant in Lhokseumawe, said yesterday it had started evacuating dependents because of the rising tensions. And the separatist fever is spreading. Several thousand people are expected to rally near the capital of Irian Jaya today in the first of a series of actions leading up to December 1st, which West Papuans consider their independence day. For President Wahid, there is no relief in sight.