The following correction was printed in the Observer's For the record column, Sunday September 30 2007





By 8pm in the main square of the dusty town of Vallegrande, the only sound is the buzz of prayer coming from the church. Inside, devoted Catholics sit and stand around the image of Our Lord of Malta - the only black Christ in Latin America, brought to this Bolivian town during the Spanish conquest.

But this is not the only foreign element of devotion. Father Agustin, the Polish priest, reads out prayers written down by local people: 'For my mother who is sick, I pray to the Lord and ...', hesitantly, 'to Saint Ernesto, to the soul of Che Guevara.' 'Saint Ernesto,' the parishioners murmur in response.

It was here in Vallegrande, 40 years ago, that the corpse of Ernesto 'Che' Guevara lay on display, eyes open, in the hospital laundry. And it is here that his unofficial sainthood is becoming firmly established. 'For them, he is just like any other saint,' Father Agustin says ruefully. 'He is just like any other soul they are praying to. One can do nothing.'

On a bench in the square, Freddy Vallejos, 27, says: 'We have a faith, a confidence in Che. When I go to bed and when I wake up, I first pray to God and then I pray to Che - and then, everything is all right.' Freddy wears a cap bearing Alberto Korda's iconic image of Guevara. 'Che's presence here is a positive force. I feel it in my skin, I have faith that always, at all times, he has an eye on us.'

Guevara, born in Argentina to an impoverished aristocratic family, was caught on 8 October, 1967, by US-trained Bolivian rangers as he was trying to open up a new front in his revolution. Guevara was executed the following day in a little adobe school in La Higuera, and his body brought the 70 miles to Vallegrande.

Forensic experts found his skeleton 10 years ago and it now rests in a mausoleum in Cuba, where he achieved his most impressive victory in 1959. Standing at the site of his first grave, the president of the Che Guevara Foundation, Osvaldo 'Chato' Peredo, said: 'Why do we say Che is alive? Because of his grandeur, his transcendence. For us, Che is here, very much alive, in everything we say.'

Eight-year-old Juan Ernesto (named after Che), who lives amid Vallegrande's eucalyptus trees, says: 'I feel good that he is right there, close to me.'

In his 1967 dispatch to the Guardian, journalist Richard Gott, in Vallegrande on the day of Guevara's death, wrote: 'It was difficult to recall that this man had once been one of the great figures of Latin America. It was not just that he was a great guerrilla leader; he had been a friend of Presidents as well as revolutionaries. His voice had been heard and appreciated in inter-American councils as well as in the jungle. He was a doctor, an amateur economist, once Minister of Industries in revolutionary Cuba, and Castro's right-hand man. He may well go down in history as the greatest continental figure since Bolivar. Legends will be created around his name.'

Gott was right. Susana Osinaga, a nurse who cleaned Guevara's body back then, recalls: 'He was just like a Christ, with his strong eyes, his beard, his long hair.' Today the laundry where Guevara's corpse was laid is a place of pilgrimage. On the wall above Osinaga, an engraving reads: 'None dies as long as he is remembered.' Osinaga has an altar to Guevara in her home. 'He is very miraculous.'

Gott's companion that day, Christopher Roper, compared Che to a medieval painting of John the Baptist, 'who then became the iconic figure in death for millions who had paid little or no attention to him while he was alive'. Osinaga admits she had no idea who Che was until his death.

In this region, images of Che hang next to images of Jesus, the Virgin Mary, Pope John Paul II and Bolivia's President Evo Morales. Stories of miracles have mushroomed. The winding road that connects Vallegrande to La Higuera leads to a cluster of humble houses, walls plastered with Che's images and graffiti. In the middle of the village is a cobbled star-shaped square with a small bust of Che; next to it is a large altar with a cross and a big grey sculpture of Guevara. Melanio Moscoso, 37, sits against a wall next to a Guevara poster. 'We pray to him, we are so proud he had died here, in La Higuera, fighting for us. We feel him so close,' he says. His neighbour, Primitiva Rojas, professes devotion: 'I have lots of faith in him. Because he stopped existing does not mean he is not here with us.' A few days ago, when feeling sick, she prayed to him and soon felt better. 'That same night I dreamt of a man with a black beard and tender eyes, who was telling me: "I was the one who cured you".'

According to his executioner, Mario Teran, Guevara's last words were: 'Calm down and point well; you are about to kill a man.' What came after the shots, according to inhabitants of La Higuera like Manuel Cortes, was that 'Saint Ernesto was born in La Higuera'.

In Pucara, Remi Calzadilla wears a beige cap that says 'Che'. He prays to him every day. 'And he helped me; a few years ago I couldn't walk at all', he says, describing how every time he 'speaks' to Che he feels 'a strong force inside of him'.

'I am devoted to him as if he were a saint,' Remi's grandfather, Conrado Calzadilla, 83, adds, jutting a proud chin in the direction of one of the images of Che plastered on the wall of his home. 'Still, 40 years after his death?', I asked. 'Always', he replies. 'Always.'

With local sainthood and worldwide immortality, history has not proved true the claim that Guevara made on the day he was captured. 'Halt, do not shoot, I am Che Guevara and I am worth more alive than dead,' he said, as he lay wounded on a rock. In that same stone today, a shiny white inscription reads: 'Che is alive.'