'She's a little baby, chief, now I'm looking at her properly, what a baby,' said the voice at the end of the telephone. 'Beautiful smile, white, white skin, long hair… makes your mouth water.'

'My God, bring her her to me to see right now,' came the excited reply.

The call between two paedophiles lining up their next victim for abuse and recorded by police investigators would leave Brazil in a state of shock.

For decades, a town had been run by a gang of predatory paedophiles - most of whose members held powerful positions in the council, judiciary and even local schools.

The first voice on the taoe is that of Adriano Salan, the Minister of Administration in Coari, a wealthy town of 77,000 in the Brazilian Amazon, 280 miles west of Manaus.

His 'chief' and the gang's leader is Adail Pinheiro - the town's mayor.

Sick: Caori mayor Adail Pinheiro is arrested for the first time in 2008. He spent just 63 days behind bars despite shocking allegations of paedophilia spanning decades

Smirking predator: Pinheiro would have a team of staff who would wait near the gates of schools and outside churches in the town, taking photos and video footage of young girls for his selection

After the taped conversation was made public, victims and witnesses started to come forward and the the true scale of the horror happening in this remote jungle town was finally exposed.

Those in the ring included the mayor's chief of staff and closest aides, council ministers, military policemen and countless other employees, including drivers, secretaries and the mayor's housekeepers, according to dozens of testimonies given to prosecutors.

They are accused of using money from public coffers to finance the abuse and rape of hundreds of girls aged between nine and 15, all on the orders of Pinheiro, 51, now in his third term as mayor.

Disturbingly, some of that money is believed to have come from royalties paid by oil and gas companies, including British oil giant BP.

And for decades they had been allowed to operate openly and with impunity - counting on the participation of police chiefs and judges to silence victims and halt any attempts to investigate the claims.

Sickeningly, the mayor would have a team of staff who would wait near the gates of schools and outside churches in the town, taking photos and video footage of young girls, according to allegations made by a former employee.

The material, he claimed, was then taken to Pinheiro, who would action another team, tasked with contacting the girls families and offering everything from money, mobile phones, computers, even jobs, land and houses, to parents in exchange for their daughters.

Few girls 'chosen' by the mob would escape being abused - often at private parties on boats or on board a council medical plane, according to allegations heard by police investigators.

A lot of things were given to them, computers, expensive mobile phones, a whole load of things were bought in my name and given to them - Pineiro's former driver

The mayor was known to prefer the youngest girls, and particularly virgins, for whom he would pay as much as £1000. Last New Year one of his aides allegedly promised a 13-year-old virgin girl for him 'as a New Year's Eve present'.

The gang's grip on the town was so strong that few ever dared speak out, fearing retaliations and even death threats.

Families often felt they had no choice but to hand over their children for abuse.

It was later found that 70 investigations had been started against Pinheiro - and every one of them halted or shelved by a 'web of protection' provided by corrupt officials, including even federal judges.

He was even arrested after being accused of child abuse in 2008 - but was inexplicably released and the case dropped after just 63 days.

Gift: A 13-year-old virgin girl who was allegedly promised to Pinheiro as a New Year's Eve present, spoke out to Brazil's Fantastico programme earlier this year

Repeated: This woman claimed that she was raped by Pinheiro when she was age nine and that the mayor wanted to abuse her 11-year-old daughter

Even the horrific phone calls between Pinheiro and his staff were only discovered by police at the beginning of this year - seven years after they were first recorded during another shelved investigation - after a flagship Brazilian TV programme began to probe the claims.

Following a national public outcry, Pinheiro and five other ringleaders named in the tapes were arrested in January this year and transferred to a prison in Manaus.

Eleven months later, however, an investigation by MailOnline has found that nothing has changed in Coari, where poor families are still at the mercy of the paedophile gang who are in control of the town council.

Things are much worse in Coari. We are being terrorised every day by Adail's men. People are being threatened and even killed. Our daughters are even more vulnerable than they were before - Caori resident

While Pinheiro remains in custody in Manaus, he is believed to still command the group, who have reportedly been threatening and bribing families of victims to change their statements on his orders.

And, according to residents, most of those widely known to be part of the ring are still in their posts in the council.

They include Maria Landia Santos, the Minister for Environment and Tourism, who in 2008 was accused by public prosecutors of being a pimp who recruited young girls for the mayor.

One Coari resident told MailOnline: 'Things are much worse in Coari. We are being terrorised every day by Adail's men. People are being threatened and even killed. Our daughters are even more vulnerable than they were before.'

Two of those arrested with Pinheiro - Minister of Land and Housing Franciso Oliveira and the mayor's chief of staff Eduardo Oliveira Alves - were quietly released and are back living in Coari.

The other arrested council workers were transferred from Manaus back to an open prison in Coari, where, according to local campaigning website Radar Amazonico, they are free to leave during the day and have even been seen frequenting the town's bars and nightclubs.

Pinheiro, meanwhile, has also been moved from prison and granted a privileged cell in the city's army barracks. According to reports, he was even allowed out to watch the England v Italy World Cup match at Manaus' Arena Amazonia in June.

Gang: Of the six arrested, including Pinheiro, there was civil servant Alzenir Maia Cordeiro, left, his driver Anselmo do Nascimento Santos, right, his personal aide Elias do Nascimento Santos, below left, Francisco Erimar Torres de Oliveira - the minister of lands and housing, bottom right and the mayor's chief of staff Eduardo Jorge de Oliveira Alves

Most incredibly, though, despite assurances that Pinheiro would be removed from his post as a result of the allegations, he is still officially the mayor of Coari, appearing on the homepage of the council's website.

Reporter Any Magareth, from Radar Amazonico, says people in Coari believe Pinheiro, who never married but has three children, will also be released soon and the town's nightmare will continue as normal.

She says: 'Adail Pinheiro in Manaus has been sending his emissaries out to lure the families of his victims with money and favours.

'Many are already disillusioned because they see that their accusations led to nothing, except to them being persecuted, with some even having to move home to other towns, so now we are seeing them changing their stories and claiming they were mistaken.

'That's how some already managed to be released from jail, and the same arguments are being used to secure the release of Adail too. And, as time is the friend of all injustices, he'll surely also be set free soon.'

The accusations levelled against the mayor of Coari and his henchmen are truly horrific.

One ex-employee who worked closely with Pinheiro for a year told Brazil's Fantastico programme how girls, none older than 15, were recruited to take part in orgies organised by council staff.

Now in hiding after receiving death threats for speaking out, he said: 'He only wanted little girls. He'd say, bring a little baby for me, 12 or 13 years old. I personally saw 15 to 20 girls being taken to him.

'He'd send his teams out who would wait at the entrances and exits of schools. They'd report back to the mayor, and he would action another team who would convince these girls to perform the sexual acts.'

He raped me there right inside the boat. I was terrified, ashamed, I never managed to get that out of me. Today, he wants my daughter - alleged victim of Pinheiro

Another former member of Pinheiro's staff, his ex-driver Osglebio da Gama, told police in a recorded interview how he would be sent to the homes of the girls' families to buy them with money and gifts.

He said: 'A lot of things were given to them, computers, expensive mobile phones, a whole load of things were bought in my name and given to them. I was the one who handed them over. It was always me taking the money to them, 5,000, 6,000 reals (£1,200, £1,500).

'It's because Adail is sick. He is sick. He's not like normal guys. We see a beautiful woman and say, "look at that babe". Not him, that doesn't do anything for him. He just wants to know about the little girls.'

Federal police investigators believe Coari's paedophile ring is entirely financed by millions of pounds of public money.

One of north Brazil's wealthiest municipalities because of rich oil and natural gas reserves, Coari's town council receives around £82 million a year from oil company royalties.

As well as Brazil's state oil company Petrobras, the next biggest explorer was HRT Oil & Gas, which is 45 per cent owned by TNK-BP, a Russian company half-owned by British oil giant BP.

Another Federal Police investigation found that, in just five years, around £13 million went missing from Coari's public purse.

Few doubt that the large amounts of money flowing into Coari's coffers from multinational oil and gas companies helped bank, maintain and cover up the gang's activities for years.

And with much of the town's population living in extreme poverty, the offers of huge sums of cash - or, according to some allegations, a job, a new home or expensive medical treatment - convinced many families to do the unthinkable.

Protests: Incredibly, when a parliamentary inquiry arrived to investigate the claims in Coari, Pinheiro closed municipal buildings so public employees could demonstrate against the panel who had come to visit victims

In a video testimony recorded by the town's social services, the 13-year-old virgin girl who had been promised to the mayor for New Year told how she was being forced into doing it by her own mother, who was to receive money in exchange.

Her voice trembling, she said: 'What am I supposed to do? Nobody can give me an answer. The other way is for me to lose my virginity.'

Days before the planned meeting on New Year's Eve, the terrified girl fled Coari and went to stay with relatives in Manaus.

A friend told the Fantastico programme how when her mother discovered she had refused to go with Pinheiro she beat her up.

She said: 'I saw the bruises on her body. Because she didn't go. Her mother had been emotionally blackmailing her, you understand? So that she would do it.'

The most recent accusation comes from a 13-year-old girl who claims she was forced by her mother to have sexual relations with the mayor in exchange for cash.

In a recorded interview with social workers she also claims he tried to recruit her to find virgin girls for the gang.

Among the things we have heard today is that he didn't like to repeat the same girl, he would put the girls in a circle and choose the one he would abuse, along with his friends - Inquiry chairman Lilian Sa

She said: 'He said he would pay me 2,000 reals (£500) for each girl. As long as they were virgins. He wants girls and they have to be virgins. I feel sad because I don't want to do this.'

Another of Pinheiro's victims told the Fantastico programme how, 20 years after first raping her as a child, the mayor is now set on abusing her daughter.

She said: 'I was just nine. My mother worked as a cook in a boat. I stayed there, playing, while my mother was working. He raped me there right inside the boat. I was terrified, ashamed, I never managed to get that out of me. Today, he wants my daughter.

'She's eleven years old, so he is destroying my whole life, because it happened with me, with my own blood and now he wants my daughter too. He is a monster.

'He thinks he's all powerful, he persecutes, he oppresses, he forces people to do what he wants, and if you don't you have nowhere to go, you die of hunger, you have to leave town.'

Pinheiro's grip on the town was evident on the day congresspeople from Brazil's Parliamentary Inquiry into Child Exploitation arrived to investigate the allegations in June last year.

The council had declared a public holiday on the day so that civil servants could protest against the arrival of the the commission.

Even schools closed for the day, and Pinheiro's aides could be seen directing the mob, who followed the groups of parliamentarians shouting insults and waving banners, according to press reports.

Warning: The lawyer acting for the Parliamentary Inquiry claims he has been the target of death threats, posting this pictire to Facebook with this message 'You Will Die' written in the dust

Pinheiro and others accused had been summoned to give evidence, but despite assurances they would cooperate all fled town on the day, with Pinheiro leaving a medical certificate claiming he was undergoing a surgical procedure in Sao Paulo.

After hearing from the group's victims, commission member Amazonas State Deputy Luiz Castro, said: 'What we have seen today in Coari was a separate country, as if we had an enclave outside of Brazil, a lawless land, with no respect for children, no respect for adolescents, no respect for families, adults.

'We have seen men of our own age, of my age or younger, crying like children during their testimonies, a feeling of impotence, of frustration, before situations of complete injustice. People drive around carrying guns, in blacked-out cars, they threaten, persecute, follow, send messages, shoot.

'The arrest of the ringleader wasn't enough. On the contrary, the climate here is one of even more terror.

'Mr Pinheiro, who for some is sick and for others is a terribly evil character, is an unrepentant paedophile. All the evidence from previous investigations is enough to condemn him. The evidence collected today, even more so. It's not just him. There are a lot of people in Coari who are involved in this gang.'

Congresswoman Lilian Sa, the Inquiry's chair, said: 'Among the things we have heard today is that he didn't like to repeat the same girl, he would put the girls in a circle and choose the one he would abuse, along with his friends.

'This is something that we simply can no longer close our eyes to.'

As expected, though, those who suffered the most following the commission's visit to Coari have been those who chose to bravely speak out.

One 13-year-old girl and her mother, who told of how she had been targeted by Pinheiro and a meeting arranged by his henchmen, had to be removed from town by federal agents after suffering threats and retaliations.

The Amazonas state human rights council confirmed the family are now living in a safe house under the witness protection programme. Another witness was also moved from Coari after suffering threats and an assassination attempt, according to the Radar Amazonia website.

One newspaper stall owner, Raimunda de Moura, who dared to sell newspapers reporting the accusations, claimed her business was closed down by military policemen on the orders of the gang.

She said, in a statement to Amazonas' State Legislative Assembly in Manaus in June: 'They did this to try to prevent these newspapers circulating in the town. Now that [Pinheiro] is in jail, he is even more in charge than when he was free. Because he orders and his soldiers here do everything he wants.

'The whole town is oppressed. I don't know what I will do when I get back to the town, but I don't have anywhere else to run. If I stay quiet, I run the risk of dying and if I speak, I run the same risk. So, I'm here, in the name of those who are there, too afraid to speak out.'

Wealthy: The town has enjoyed a healthy flow of cash because the region is oil rich. As well as Brazil's state oil company Petrobras, the next biggest explorer was HRT Oil & Gas, which is 45 per cent owned by TNK-BP, a Russian company half-owned by British oil giant BP

Even the lawyer acting for the Parliamentary Inquiry claims has been a target of death threats. Fabio Amorim, who lives in Manaus, posted a photo on his Facebook page of his car rear window with the words 'You Will Die' written in the dust.

In July this year, in the days after 48 witnesses were notified of the day they were to be heard in court, Pinheiro's gang set to work convincing them to change their stories, according to information collected by local journalist Gustavo Rodrigues.

One, he claimed, was offered a prominent job in the council. Others were given death threats if they didn't drop their statements. One of Pinheiro's victims told how one of the mayor's staff rang her home and told them to 'prepare the wood for their coffins.'