When Claudie Le Bail joined tens of thousands of Breton "red cap" demonstrators protesting in Carhaix at the end of November to oppose regional job losses and a green tax on road freight, she took her 79-year-old mother with her.

"It was her first demonstration. She said the disappearing jobs will affect her children. Every generation is affected," says Le Bail, a 55-year-old educational worker with disabled children who lives in a small village in the far-flung and economically-depressed Breton department of Finistère.

The town of 15,000 is ground zero in the revolt of the red caps – named after Breton bonnets rouges who led an anti-tax protest in the 17th century. The red caps mobilised in a wave of nationalist fervour at the end of last year, bringing together bosses, farmers and workers in a single cause, and crystallising the French disgust at their rising tax burden. "It's rekindled Breton pride," says Le Bail's husband, Daniel Caillavec, who has watched the competitors to his plant nursery vanish one by one in the recession. "We're now taking our destiny in hand."

But the protests against the eco tax turned violent and scores of traffic cameras and portals – set up to monitor the passing lorries which would be liable for the tax – have been burned and vandalised across Brittany.

The Socialist government has announced the suspension of the tax, which had been due to come into force on 1 January, but the red caps have continued their campaign, demanding its cancellation altogether. The most recent attack on a motorway radar was last weekend, and their first action of 2014 will come on Sunday, when members are to occupy bridges straddling the motorways throughout Brittany.

The red caps are led by Christian Troadec, a stocky former journalist who has been mayor of Carhaix on a leftwing ticket for 12 years. Troadec says that although he founded the local committee which called for Sunday's protests, he had not expected such an initiative so early in the new year. "Committees are popping up all over the place, like mushrooms after rain," he says in an interview in his ground floor office at the town hall. He plays down the violent incidents as "isolated acts" by people "taking advantage of the situation". He is organising a meeting on 11 January of all the local groups, which he says total about 40, to structure them within a federation. But his main focus now is preparing for the second act of the revolt with a big congress in March which will formally take up Breton grievances.

Some Bretons are wary of the red caps movement, which was orchestrated by haulage companies and business leaders, while others see anti-government political manipulation by the extreme-left and extreme-right parties which took part. The movement has also been marked by political infighting, a trades union split, and personal rivalries behind the surface unity. Detractors of Troadec, who put Carhaix on the map by co-founding the Vieilles Charrues (Old Ploughs) music festival that now attracts international stars, accuse the mayor of crushing dissent to further his own regional political ambitions. But, says the mayor, "if I were that much of a dictator, how come I was re-elected with 68% of the vote?"

Troadec, 47, links the emergence of the red caps to the aftermath of President Nicolas Sarkozy's defeat in May 2012 by Socialist candidate Francois Hollande. "Things went pear-shaped very quickly. The election was a rejection of Sarkozy. But because Hollande didn't promise anything, the bitterness grew," says Troadec, who points to a rise in support for the extreme-right National Front in Carhaix, where the unemployment rate has risen to the national average of 10%.

He identifies the loss of 8,000 jobs across the region over the past 18 months, mostly in the food processing industry, as the principal cause for local concern. The community also took to the streets in 2008 over plans to close the maternity wing at the Carhaix hospital, a decision which the protesters managed to reverse. Troadec was active in that struggle too.

Then came the government's decision last year to enforce the eco tax, approved under Sarkozy, from 1 January 2014 – it became the last straw for the Bretons, who worried that the haulage companies would pass on the taxes to consumers, further undermining the local economy.

But Troadec is not stopping with the campaign to abolish the eco tax. He is pressing for the transfer of real economic clout to Brittany. "We want devolution like you have in the UK. France is the most centralised state in Europe," he says. Although there is a regional parliament which sits in Rennes, "we have no institutional power over our own economy or culture".

He dismisses as "recycling" a pact announced by the prime minister, Jean-Marc Ayrault – a former Breton mayor – last month to defuse the red caps' protests, providing for €2m of investment in the region.

Behind the town hall is a restaurant called Ar Bonnedou Ruz, or red caps in the Breton language. Its Marxist owner, Matthieu Guillemot, who is a spokesman for the Anti-Capitalist party, says "a real battle is starting now. The Ayrault plan can't be imposed on us."

In his restaurant, he serves beef from cattle raised and slaughtered in Brittany, which costs him more than the meat from Breton cattle slaughtered in Germany. It highlights the fundamental problem at the root of the job losses across the region: despite receiving European subsidies to modernise and restructure, the food processing industry failed to recognise the challenge from globalisation and has been hard hit by competition from abroad.

"There are the ingredients here for a mini-revolution, we can frighten the government," says Guillemot.

Is the government scared of the red caps? "In France, we are used to social spasms, especially in agriculture," says the Socialist deputy for the Finistère constituency which covers Carhaix, Richard Ferrand.

Ferrand acknowledges the "great distress" in the local community. But he says that green shoots of recovery are appearing, notably thanks to a Chinese company's €100m investment in a factory to produce milk powder for export to China. The ground-breaking ceremony in Carhaix takes place on 10 January.

Asked how the government plans to react to the red caps conference in March, Ferrand shrugs. But he adds diplomatically: "We are not the red caps. We keep the red caps inside our heads, not on our heads."