He didn't look much like a doctor, the scruffy, grey-haired man bundled by armed police off a flight to Mexico City, but then he didn't really resemble one of central America's most powerful criminal masterminds, either.

Eduardo Arellano Felix, one of seven brothers who founded the notorious Arellano Felix drug cartel in the 1980s, was arrested in his unwashed jeans and tracksuit after a weekend gunfight in Fraccionamiento Pedregal, a hillside suburb of Tijuana, the Mexican border city where his empire was built.

It marked a suitably dramatic end to the career of a man known locally as El Doctor, thanks both to his previous life as a medical student and the famously clinical manner in which he despatched anyone unfortunate enough to land on the wrong side of his massive cocaine smuggling network.

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The arrest of Felix, 52, is a fresh setback for the Arellano Felix organisation, which, for more than two decades, has controlled the cross-border flow of narcotics into the southern US states. Five of its seven founding brothers have been killed or jailed in recent years.

Shortly after 5pm on Saturday, more than 100 armed police stormed the gated luxury home where Felix was living under an alias. Although dozens of shots were fired, he surrendered prematurely to protect his 11-year-old daughter, who was in danger of being caught in the crossfire.

"This is a significant blow to what is left of the organisation," said a police spokesman. Felix faces extradition to the US, where he was accused in 2003 of being responsible for racketeering, drug trafficking, money laundering and several killings. His arrest comes against the backdrop of a bloody power struggle within the fracturing Arellano Felix empire, which has brought fear to Tijuana and been blamed for 150 deaths in the city in the past month alone.

Most killings are attributed to a dispute between Felix's nephew Fernando Sanchez Arellano – now the cartel's unofficial leader – and Eduardo Garcia Simental, a gangster known as El Teo. The bodies of some of their victims were dissolved in acid. Others were left with their tongues cut out, and warnings to the rival faction carved in their flesh. In one incident, several severed heads were placed on top of torsos.

The level of bloodshed has sparked public outrage (many innocent bystanders have been killed or injured) and placed severe pressure on Mexican law enforcement officials and President Felipe Calderon, who have been accused of ignoring the battle against organised crime. Felix's arrest marked a propaganda victory for both parties. But although he is a symbolic figurehead of the cartel, experts warned that, for most of the past decade, he took a back-seat role in its day-to-day running.

"It is another very significant blow to the Arellano Felix organisation but we do know they are not completely destroyed," said David Shirk, of the University of San Diego's Trans-Border Institute. "What is clear to me is that things have become much more fragmented and, therefore, much more difficult to interpret."

Eduardo Felix is one of seven brothers from Sinaloa state who rose to prominence in the 1980s as Colombian drug barons, shut out from their traditional smuggling routes across the Caribbean, began teaming up with Mexican associates. Although little is known of their childhood, the family shared a ruthlessness that helped them take control of Tijuana, the biggest cocaine route into the US, which is in turn the world's biggest market for the drug. By the 1990s, they were taking several tonnes across the border each month, killing or torturing anyone who came in their way, including hundreds of police, prosecutors and judges.

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In recent years, however, the cartel has faced increasing problems. Rival gangs moved in on their patch and law enforcement officials caught up with all of the original founders, with the exception of Carlos and Luis, who no longer have significant roles. In 2002, Benjamin, the gang's planning chief, was arrested and its enforcer, Ramon, was killed. Francisco, the eldest brother, was extradited to the US in 2006. In the same year, the then leader Francisco Javier, known as El Tigrillo (The Little Tiger), was caught on a fishing boat off the coast of Baja California.

Eduardo has always has been considered the most secretive and reclusive of the seven. His low profile within the cartel stemmed partly from his alleged role in the 1993 killing of Juan Jesus Posadas Ocampo, the Archbishop of Guadalajara. "That was a pivotal moment in how the Arellanos were perceived in Tijuana and in Mexico in general," said John Kirby, a former US federal prosecutor who co-wrote the original indictment against him. "All of a sudden, everybody was their enemy."

Even before his arrest, Eduardo Felix had a turbulent private life. In 1998, he was badly burned in a propane gas stove explosion that killed his infant son. Soon afterwards, his estranged wife Sonia – the mother of his 11-year-old daughter – was killed by Arellano gunmen who suspected her ofco-operating with US officials. Photographs released yesterday show he has aged significantly from the dark-haired figure on two decades of "wanted" posters (the US had for years placed a $5m bounty on his head).

Burn scars on his arms and chest, the result of the stove accident, helped Mexican officials confirm his identity.

Cocaine capital: Mexico's drug trade

*Ninety per cent of all cocaine bound for the US comes through Mexico.

*According to latest figures from the White House, $13.8bn of heroin, amphetamines, cocaine and marijuana from Mexico are sold to American users every year.

*More than 3,000 lives have been lost in connection with drugs-related violence already this year in Mexico. In 2006, in the state of Michoacan, five severed heads were thrown by gunmen on to a nightclub floor.

*On average, there are three to four kidnappings in Mexico every day, a higher rate than in Iraq.

*In May, Mexico's federal police chief – the most public figure in the country's fight against drugs – was assassinated outside his house. Edgar Millan Gomez was shot nine times, with many suspecting that the attack was the work of a prominent drugs smuggling organisation.