Jakarta – A three-month truce in Indonesia's restive Aceh province enabled rebels to set up a "shadow government" across almost two-thirds of the province, a government commander based there said, arguing the truce must not be extended.

Colonel Syarifuddin Tippe, commander of one of the two military districts in Aceh, cited the creation of a shadow government in an interview late Monday as the main reason why the truce should not be extended. A state of civil emergency should be declared instead, he told AFP.

Colonel Tippe was in the midst of three days of talks with government officials in the capital Jakarta Tuesday to assess whether the truce, officially called a "humanitarian pause", should be extended. The truce – signed between the separatist Free Aceh Movement (GAM) and Indonesian government in Switzerland in May – came into effect June 2 and will expire September 2.

Acehnese say it has reduced but not stopped the violence in the resource-rich province on the northern tip of Sumatra island, where the GAM has been fighting for an independent state since the 1970s.

Tippe, arguing against an extension, claimed, without explaining, that under the truce "while the number of deaths had decreased, the quality had increased."

But more alarming for the government, he said, was the separatists' takeover of village administrations. "GAM members have put themselves in the positions of village heads in 61.1 percent of villages," compared to 4.8 percent before the truce.

"This is the most dangerous [aspect] because it's not visible. The village people are too scared to report them to the authorities," Tippe said. "They've created a shadow government."

But a GAM spokesman in the district of North Aceh denied the separatists were controlling villages, and argued that the truce should be extended. "We have never controlled villages because our headquarters are in the forest and far from residential settlements," GAM deputy commander for the North Aceh subdistrict of Pasee, Abu Sofyan Daud, told AFP.

Tippe said the truce agreement had also enabled the separatists more freedom to influence villagers in Aceh. "As we know the village is the base of GAM to influence the people."

GAM's Daud however replied that it was "natural" for villagers to sympathize with the separatists. "They know that the Indonesian government has always deceived them and that we are trying to free them from Indonesian occupation," he said.

"Any village heads who refuse to follow the Indonesian government do so of their own accord because ... they've already seen many village heads killed by the military," Daud said.

Tippe said the Indonesian military saw "very little advantage" in prolonging the truce. "In my opinion it is time to apply the civil emergency law," he said, adding that he was urging officials in Jakarta to do so.

But the military's call for a state of civil emergency has already drawn sharp criticism from rights groups in Aceh, as well as GAM. "Under civil emergency status the military will torture more Acehnese people and more people will be killed", said Daud.

The Commission for Missing Persons and Victims of Violence (KONTRAS) said a civil emergency would be a "step backwards" for Aceh. Aceh's KONTRAS co-ordinator Aguswandi said he suspected the military was "unhappy with genuine efforts by the government and GAM to continue the humanitarian pause".

Muhammad Nazar of the Aceh Referendum Information Center (SIRA) agreed. The military's call for a civil emergency showed it "doesn't want to see the Aceh problem resolved through dialogue."

On Monday the state-funded Independent Commission on Atrocities in Aceh warned the province was in danger of becoming another "East Timor", which seceded from Indonesia last year after a 25- year fight for independence.