"Get lost." Not a promising start to an interview but this is hardly a standard interviewee – a flint-eyed gangster sporting a crew-cut and a boiler suit. His two colleagues glower from behind oversized sunglasses and thick layers of suspicion. Rippling tattoos snake out of the rolled-up sleeves of Goon No 1. "Kieusero," [fuck off] he growls before slamming down the shutter of his office garage.

A well-earned reputation for unpredictability and violence keeps journalists away from the Japanese mafia, or yakuza, but a vicious turf battle between two rival gangs in Kyushu, southern Japan, has made them reluctant media fodder. The two-year war has caused six deaths and two dozen shootings and bombings. Now, in an act of collective courage that has electrified the fight against organised crime in Japan but divided this city, local people are taking the gangsters to court.

"The yakuza use weapons you might see in the Iraq war: grenades, bombs and guns that can shoot people 500m away," says Osamu Kabashima, the lawyer who is representing the 1,500 plaintiffs. "My clients have had enough. They want to live in peace, and they're putting their lives on the line to achieve it for the sake of their children and grandchildren."

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In the most notorious episode in the war, a gangster hopped up on amphetamines walked into a hospital and pumped two bullets into an innocent man mistaken for a rival. In another, outside here, the head office of the 1,000-member Dojin-kai gang, in a busy shopping area, a machine-gun ambush sprayed bullets everywhere. The attacks snapped the patience of locals, who plan to drive them out using a civil law that allows them to challenge businesses that "infringe on their right to live peacefully".

Win or lose, the legal fight will go down in history, says Japan's media. "This is the first time that citizens are trying to expel the head office of a designated gangster organisation," heralded the liberal Asahi newspaper, which praised the plaintiffs and called on the government to "drive the yakuza into extinction".

That is unlikely. Japan's National Police Agency estimates the country has 86,000 gangsters, many times the strength of the US mafia at its peak. A single group, the Yamaguchi-gumi, is the General Motors of organised crime, with nearly 40,000 members across Japan and a high-walled compound in one of the wealthiest parts of Kobe City. Magazines, comics and movies glamorise the yakuza, who operate in plain sight in a way unthinkable to Western observers.

Dojin-kai's headquarters is public and known to any Kurume taxi driver. Signs on the doors of the six-storey building politely explain that the organisation has temporarily moved and provides its new address on the other side of the train station. The new HQ, immediately identifiable by its business nameplate, is a two-storey compound in one of Kurume's better neighbourhoods. After a tense conversation, we're allowed to talk to the acting boss, who shows us into a conference room dominated by portraits of chairman Yoshikazu Matsuo, murdered last year, and his replacement Tetsuji Kobayashi, who is in jail.

"You can't publish my name," says the man, a 35-year-old who chain smokes through the interview. "We have always had a strong relationship with local people so this is a bad situation for us," he explains. "It is obvious that they are being manipulated by the cops, who want to crush us."

The police, who declined to go on the record, deny this, as does Mr Kabashima. "No ordinary person wants to live beside these gangs," he says. "There is a school close to the site of the machine-gun attack. What if the bullets had hit children?" Mr Kabashima and his family have lived in fear since his name was published in the media last year, but he says his foes are "not stupid enough" to attack him.

The yakuza have long occupied an ambiguous position in Japan. Like their Italian cousins, they have deep if murky historical links with the country's ruling party, the Liberal Democrats. A reputation for keeping disputes among themselves, not harming "non-combatants", protected them from the ire of citizens and the attentions of the police. That ambiguity was meant to have ended in 1992 when the government introduced tough anti-mob legislation, punishment for yakuza excesses during the booming 1980s when they moved into property and other legitimate businesses.

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But the state still hasn't made membership of a criminal organisation illegal or given the police the anti-mob tools long considered crucial in other countries: wiretapping, plea bargaining and witness protection, says Joshua Adelstein, author of a new book on the yakuza. "As the yakuza continue to evolve and get into more sophisticated crimes, the police have had a tough time keeping up."

A new police White Paper warns that the yakuza have moved into securities trading and infected hundreds of Japan's listed companies. Experts say the Yamaguchi-gumi, in particular, has resources to rival Japan's larger corporations. The lack of legal tools to fight the yakuza is painfully obvious in Kyushu, where the law only allows the plaintiffs to challenge hoods within a 500m radius of their homes. "It's not easy to kick them out of town," laments one. "We're demanding that they stop using the building as a place of gathering. They own the building, it's their property and we can't make them give it up."

Even if they move, the mob will pop up somewhere else in Kurume, admits a senior official at the city office, which is backing the plaintiffs. "The Japanese have learned to live with the yakuza," said the official, who also asked to remain nameless.

The Dojin-kai are believed to operate protection rackets, transport firms, sex businesses and loan-sharking across the city. If unchallenged, the mob invests huge untaxed profits in real estate, eventually taking over whole blocks of cities like this. "We have to hope that if they relocate, the residents of the new area will challenge them again," says the official. "The yakuza are strong on a one-to-one basis but they are extremely weak in the face of collective action."

Kurume's problems began in 1986-87 when a feud between the Dojin-kai and a local affiliate of the Yamaguchi-gumi claimed nine lives and injured 16 people. Local people organised a protest march on the gang headquarters. The latest chapter began in May 2006 when the long-time Dojin-kai boss Seijiro Matsuo announced his resignation, sparking a war of succession with a splinter group, Kyushu Seido-kai.

Not everyone is rooting for the plaintiffs. "We're not against the people going to court but if they win, the yakuza might relocate close to us," frets Yuichiro Okamura, who owns a small restaurant beside Kurume station. The owner of a vegetable shop next to the Dojin-kai building said the plaintiffs should let sleeping dogs lie. "The yakuza have never done anything to me. But the people in that building have much better manners than some of the youngsters around here."

As the legal battle takes off, the gangs appear to be winding down their war. Seido-kai recently announced the resignation of its chairman and the end of hostilities with Dojin-kai in a statement sent to the local police. But the plaintiffs still live in fear of intimidation or worse, and the authorities have given them beepers linked to local police stations. "Unless we take action against them, the group will keep growing stronger," said one. "We don't want them in this town."

People living close to the Dojin-kai building are pessimistic that anything will change without government intervention. "When the gangs moved here we protested to the city and they did nothing," recalls a woman. "The government didn't even come to see us. At least the gangsters visited door-to-door to introduce themselves," she said, explaining how they brought with them pink and white rice cakes, a traditional symbol of good luck and happiness. "It was nothing to be happy about," she adds.