For Kiev's beleaguered army it was meant to be a display of strength. Early on Wednesday a column of six armoured personnel carriers trundled through the town of Kramatorsk, in eastern Ukraine. Some 24 hours earlier Ukrainian soldiers had recaptured a small disused aerodrome. Their next target appeared to be Slavyansk, the neighbouring town, occupied by a shadowy Russian militia. Was victory close?

The column didn't get far. At Kramatorsk's railway junction, next to an open-air market and a shop selling building materials, an angry crowd caught up with it. Next armed separatists dressed in military fatigues turned up too. Within minutes the Ukrainian soldiers gave up. Without a shot being fired they abandoned their vehicles. The pro-Russian gunmen grabbed them. They raised a Russian tricolour. They sat on top and went for a victory spin.

In theory this was happening in Ukraine, under the control of a pro-western government in Kiev, and several hundred kilometres from the Russian border. In reality large chunks of the east of the country are now in open revolt. Ukraine is rapidly vanishing as a sovereign state. Its army is falling apart. What happens next is unclear. But the Kremlin can either annexe the east, as it did Crimea, again shrugging off western outrage. Or it can pull the strings of a new post-Kiev puppet entity.

The militia who captured the armoured vehicles on Wednesday looked like professionals. They had Kalashnikovs, flak jackets, ammunition. One even carried a tube-shaped green grenade-launcher. Some hid their faces under black balaclavas. Others waved and smiled. All wore an orange and black ribbon – originally a symbol of the Soviet victory over fascism, and now the colours of the east's snowballing anti-Kiev movement. There was a flag of Donbass, the Russian-speaking eastern region with its main city of Donetsk.

After posing for photos, this new anti-Kiev army set off. The armoured personnel carriers (APCs) rattled past Kramatorsk's train station and turned right over a steep dusty bridge. There was a cloud of diesel smoke. Amazed locals jogged alongside then piled into battered mini-buses to keep up. White tread tracks on the tarmac pointed the way. The column covered about six miles (10km) before turning left at the entrance to Slavyansk. It then drove serenely into town and parked round the back of the city hall. Soldiers got off and stretched their legs next to the White Nights cafe.

Slavyansk residents who had been fearing an imminent attack from Ukrainian forces had a moment of cognitive dissonance. Armed pro-Russian gunmen seized control of the city administration on Saturday. Ever since, Ukrainian helicopters and planes had buzzed ominously overhead.

Militia gather by seized APCs as they stand guard in Slavyansk, Ukraine. Photograph: Genya Savilov/AFP/Getty Images

"I heard the sound of tanks approaching. I thought that Ukrainian troops had arrived," Vladimir Ivanovich admitted, gazing at the APCs now stationed opposite a small park and children's playground. "I was wrong." So who exactly were the soldiers in masks? "I don't know," he said.

He added: "I'm not a radical or a separatist. I'm actually more on the left. I didn't much like Viktor Yanukovych. I'm for peaceful coexistence. The problem is that when the nationalists seized power in Kiev they didn't think about the consequences. I have my own prognosis about what will happen next. It's not comforting."

The armed men, meanwhile, made little secret of the fact they took orders from Moscow. Many of them appeared to be Russian troops from Crimea. Asked where he had come from, one told the Guardian: "Simferopol." How were things in Crimea? "Zamechatelna," he said in Russian – splendid. He added: "The old ladies are happy. Because of Russia their pensions have doubled." Had he served in the Ukrainian army and perhaps swapped sides? "No, I'm Russian," he replied.

Within minutes, the captured APCs had become the town's newest, most extraordinary tourist attraction. Teenage girls posed coquettishly with the men in balaclavas. Small children lined up too. Someone put a cuddly toy next to a gun barrel. "We were very afraid. Now we are reassured. The tanks are here to protect us," Olga Yuriyevna said. She added: "I'm Russian-speaking. We have relatives in Russia. My husband fought in the Afghan war."

Some people, though, were lacking in enthusiasm. Outside the town hall one pensioner, Alexander Ivanovich, said: "I'm Ukrainian. This should be Ukrainian territory." Gesturing at the faceless gunmen outside the entrance, he said: "I'm suspicious of them." The soldiers had piled sandbags in front of windows, and created sniper positions on the roof. They had also, apparently, ripped down the building's blue-and-yellow trident, a symbol of Ukrainian statehood. A Russian and Donetsk republic flag flew from the roof. The impression was one of calm and vertical order.

On Wednesday afternoon Ukrainian soldiers were led out of the building and packed on to buses. The Ukrainians had surrendered when crowds surrounded their tanks. They were missing their weapons, now confiscated. The 40 or so demoralised troops headed out of town in a westerly direction.

At first the authorities in Kiev refused to believe they had lost the army vehicles. The defence ministry initially dismissed news reports as fake. Later it admitted the disaster was true. As well as APCs, Ukraine has lost control of another crucial weapon in its losing battle with the Russian Federation: television. On Tuesday the Donetsk prosecutor turned Russian state TV back on again, weeks after Kiev pulled the broadcasts on the grounds they sowed lies and Kremlin propaganda. Since President Viktor Yanukovych fled in February Russian channels have consistently called Kiev's new rulers "fascists".

Outside Kramatorsk's aerodrome, meanwhile, at the end of a rustic rutted alley lined with sycamores and apricots, protesters had set up a new camp. It boasted a parasol, a table decked out with sandwiches, and a clump of empty beer bottles. On Tuesday Ukrainian forces had opened fire, lightly wounding two anti-government demonstrators who surged at them across a field. On Wednesday Ukrainian troops were holed up inside. They showed little enthusiasm for venturing out. A felled tree blocked their route.

"We're Russians. We live on Russian soil. So how can we be separatists?" Sergei Sevenko, a 52-year-old car mechanic, wanted to know. A handful of female volunteers stood with him; they had kept vigil until 1am. Sevenko added: "I've lived all my life in Kramatorsk. The economic situation here is horrible. We're just defending our town and our property from fascists." Waiting to interview him was a young female journalist from Moscow. She was holding a microphone decorated with the logo of Lifenews.ru, the Kremlin's favourite website.

By late afternoon another stand-off was developing between a second Ukrainian armoured column in Pcholkino, near Kramatorsk, and an excitable, hostile crowd. Helicopters dipped low over shabby Khrushchev-era blocks of flats to see what was going on, then scouted along the line of the railway. Close to where the column was stuck, locals were building a checkpoint. "The helicopters keep us awake at night. We can't sleep," one complained. A van pulled up. It disgorged black tyres. A man wearing shorts and sunglasses, possibly drunk, began erratically directing traffic.

This febrile anti-Kiev mood has acquired a momentum that increasingly seems unstoppable. A vocal section of the population appears to support the protesters' key demand for a referendum on Ukraine's federalisation. A "people's governor" has been appointed – though it is not clear by whom. Many local politicians, the security services in key eastern towns and the police appear to have gone over to the anti-government side. Kiev's powerlessness in this fast-moving drama seems absolute.

On Wednesday another gang of armed youths seized control of the city hall in Donetsk. Other pro-Russian activists have occupied Donetsk's regional administration building since 6 April. (They have fortified it with a thicket of tyres. On one wall someone had scrawled in Cyrillic script: "Fuck America".) Youths lounged in the entrance lobby and ground floor of the city building. They wore white-and-red armbands bearing the name of a murky sporting organisation and fight-club, Oplot. In Kharkiv, Ukraine's other major eastern city, Oplot has been closely linked with pro-Kremlin groups. And with organised crime.

One Oplot member, Alexander, showed off his weapon. It was a US-made Remington 870 Express Magnum. "It's a hunting gun," he said. "It's my own. I've got a licence for it." Alexander said he had purchased his uniform himself: a light-coloured khaki top and trousers, a flat jacket, and a matching hat. He added: "I'm against America. But I have to say they make good guns."