Mexico's government on Saturday began demobilizing a vigilante movement of assault-rifle-wielding ranchers and farmers that formed in the western state of Michoacan and succeeded in largely expelling the Knights Templar cartel when state and local authorities couldn't.

The ceremony in the town of Tepalcatepec, where the movement began in February 2013, included the registration of thousands of guns by the federal government and an agreement that the so-called "self-defence" groups will either join a new official rural police force or return to their normal lives and act only as voluntary reserves when called on.

The federal government's commissioner for the state, Alfredo Castillo, greeted the newly uniformed men one by one at the local ranchers' association office.

Officials say they will now go town by town to organize and recruit the new rural force.

"This is a process of giving legal standing to the self-defence forces," said vigilante leader Estanislao Beltran.

'This [demobilization] agreement is just something to please the government ... With them or without them, we are going to keep at it.' - Rene Sanchez, 22

But tension remained on Friday in the coastal part of the state outside the port of Lazaro Cardenas, where other self-defence groups plan to continue as they are, defending their territory without registering their arms. Vigilantes against the demobilization have set up roadblocks in the coastal town of Caleta.

"We don't want them to come, we don't recognize them," vigilante Melquir Sauceda said of the government and the new rural police forces. "Here we can maintain our own security. We don't need anyone bringing it from outside."

Mexican media, meanwhile, reported that police arrested dozens of "false self-defence members" and disarmed them late Friday in the town of La Mira.

One vigilante group member who had been manning a road block earlier in the day told The Associated Press that his group had retreated to their homes when the police arrived about 8 p.m. and they were hearing shooting between police another unknown group.

The man, who refused to give his name for fear of reprisals, said his group was not battling the government and was hiding in their homes for protection.

Not giving up their guns

With Saturday's ceremony, the government hopes to end the Wild West chapter of the self-defence movement, in which civilians built roadblocks and battled cartel members for towns in the rich farming area called the "Tierra Caliente," or Hot Land.

Mexico Vigilantes

Mexico's government has been trying to demobilize the vigilante movement that largely expelled the Knights Templar cartel when state and local authorities couldn't. (Eduardo Verdugo/Associated Press)

The new rural forces are designed to be a way out of an embarrassing situation, in which elected leaders and law enforcement agencies lost control of the state to the pseudo-religious Knights Templar drug cartel. Efforts to retake control with federal police and military failed. Eventually government forces had to rely on the vigilantes because of their knowledge of where to find the cartel gunmen.

Since the commissioner was named in January, federal forces have arrested or killed three of the main leaders of the Knights Templar. The fourth, Servando "La Tuta" Gomez, is in hiding and rumoured to be in the rugged hills outside his hometown of Arteaga.

But the vigilante movement has been plagued by divisions, and its general council dismissed one of the founders, Dr. Jose Manuel Mireles, as its spokesman earlier this week because of an unauthorized video he released directed at President Enrique Pena Nieto.

Another founder, Hipolito Mora, is in jail accused of the murder of two alleged rivals. Castillo told Mexico's Radio Formula on Friday that he is also investigating claims that Mireles was involved in the killing of five vigilantes near Lazaro Cardenas on April 27.

Meanwhile, no one is giving up their guns, even assault weapons prohibited under Mexican law.

Vigilante Irineo Mendoza, 44, drove down from his mountain hometown of Aguililla to register his gun with authorities this week. He plans to take the weapon back home with him because, he says, the Knights Templar remain hidden in the mountains.

"These are the guns we are going to fight them with," Mendoza said.

Many predict little will change after Saturday.

"This [demobilization] agreement is just something to please the government," said Rene Sanchez, 22, a vigilante from the self-defence stronghold of Buenavista. "With them or without them, we are going to keep at it."