Marianne Kearney, Jakarta – Once the Permuda Pancasila comprised the strong arm of the ruling Golkar party. Its members ran everything from karaoke clubs to gambling and prostitution rackets. They inspired fear and loathing across the archipelago ruling not just the back alleys of Jakarta, but also ensuring that none of the government's opponents got out of line.

But now, these Suharto-era gangsters are being challenged on all fronts, even muscled out of their lucrative thugs-for-hire business by younger, more politically opportunistic groups such as the Islamic Defenders Front.

Their control of most of the illegal businesses in the old part of Jakarta and across Java – prostitution, gambling and drug dealing – is also slipping, said analyst and historian Dr George Aditjondro. "In the past you had monolithic political thuggery, but now it has branched out into secular groups such as the PDI-P's Satgas and into Muslim groups such as the Islamic Defenders Front," he said.

Dr Aditjondro was referring to the Indonesian Democratic Party-Struggle and other parties' civilian security force, or Satgas. "What has happened in Solo and Jakarta is that many have changed shirts and joined the Islamic Youth Movement or the Islamic Defenders Front," he said, referring to Islamic youth movements which are strong in Solo, central Java and Jakarta.

At their recent general meeting, held once every five years, hundreds of Pemuda Pancasila members kitted out in orange-and-black camouflage uniforms, some armed with knives, met to discuss the future of their 42-year-old organisation.

Many still believe it is an essential part of Indonesia's nationalist struggle. "We're trying to build up our organisation into a modern, professional organisation that is doing good, such as social-welfare projects," said chairman Yorrys Raweyei.

The group's energetic Riau commander, Mr Nasaruddin, added: "Before, Pemuda Pancasila had the stigma of being dirty and negative, but it's different now. Just as they have environmental associations in Europe, in Indonesia we have Pemuda Pancasila. We are like the Greenpeace of Indonesia."

While Pemuda Pancasila members do not admit their old turf has been taken over, they do admit to needing a new strategy – and more money. In resource-rich Riau, the organisation is fulfilling its social mission and no doubt making money by providing protection for multi-national corporations and local businesses, said Mr Nasaruddin.

It also offers assurances to foreigners that they are safe from search-and-expel operations by Muslim groups opposed to American companies, he said. In West Papua, Permuda Pancasila has adapted itself to the local situation, providing some of the muscle for the pro-independence guard, Satgas Papua. In Kalimantan, members claim they are involved in building mosques and schools.

Local journalists say they are also involved in timber smuggling and mining, as well as the protection of local and regional governments.

One of Pemuda Pancasila's most notorious feats was the 1996 attack on then opposition leader Ms Megawati Sukarnoputri's Indonesian Democratic Party-Struggle (PDI-P) headquarters in which several people died. In 1999, the group is said to have masterminded the killing of more than 100 black-arts practitioners in East Java in a bid to destabilise Indonesia, according to analysts.