CHAITEN, Chile (Reuters) - Hostel owner Rita Gutierrez Vargas would rather run the risk of being incinerated by another volcanic eruption than leave the Chilean town where she has spent her entire life.
Her mud-caked, ash-smothered town of Chaiten deep in Chile's southern Patagonia region was devastated after a spectacular eruption last year, and is still at risk as the nearby volcano of the same name continues to belch a vast column of ash and gas.
There is no running water, no electricity, most of Chaiten is a ghost town and there are sporadic earth tremors. But Vargas, 51, and a clutch of fellow holdouts vow to stay put, and reject a government plan to write off Chaiten and rebuild from scratch a few miles (km) north.
"Fifty percent of Chaiten is still alive, the government cannot kill it," Vargas said, gesturing at intact buildings as she and a dozen other residents gathered in a town square to protest the resettlement plan announced on Wednesday.
"I'm not afraid of the volcano. It lived with us for many years, now we are adapting to living with it," added Vargas, who has draped a Chilean flag on her hostel's facade and a sign rejecting the resettlement plan.
Nearby, houses and cars remain mired in debris after the volcano erupted last May for the first time in thousands of years, sending ash as high as 20 miles into the stratosphere and coating towns in neighboring Argentina.
No one was killed in the eruption, but one person died of a heart attack while being evacuated.
Dogs and horses still roam free after most of the town's 5,600 residents left months ago to live in shelters and with friends and relatives. Just under 100 people remain in Chaiten, residents say.
Toys lie strewn where they were dropped back in May. Bicycles, clothing, a mangled child's highchair are abandoned in the dirt. The air is heavy with the smell of sulfur.
Smeared in the ash on the window of one house is the message, "I love you Chaiten. We'll be back."
The volcano spewed ash, gas and molten rock last week as its cone partly collapsed, prompting a fresh evacuation of around 160 people from the town some 760 miles south of the capital Santiago.
Paula Narvaez, President Michelle Bachelet's envoy to Chaiten, says the government will not restore services like power and water. Instead it will focus on building a new version of the town at the settlement of Santa Barbara about 6 miles away.
Interior Minister Edmundo Perez Yoma last week declared Chaiten "dead," and another official said the government would do all it could to prevent "collective suicide" by residents who refuse to leave.
But by law, the government cannot force the holdouts to leave.
"It is irresponsible (of them). They are exposed to a danger that can be avoided," said Narvaez. "They are adults and have the available information. There's not much more the government can do."
Juan Santana Vargas, who moved to Chaiten 16 years ago, says his tourism business will be ruined if the town is moved.
"We know what we're dealing with is Nature and that it has to be respected," he said. "We are not going to go up against Nature, we will be careful. We have an evacuation system on all sides."
"(Moving Chaiten) is terrible for all businessmen. Putting Chaiten elsewhere will take years," he added. "And the way the government is approaching it, they will never build it."
Jorge Munoz, a volcano expert with Chile's geological survey, says Chaiten's residents are in danger.
"Chaiten faces a high volcanic risk. There is an eruption underway," he said. "The volcano is extremely active."
Munoz says the volcano poses two main dangers. One is that rains could displace millions of tons of volcanic material that crumbled when the cone's side wall collapsed last week. It would then mix with the water of a nearby river that flows through the town and create a muddy torrent like the one that destroyed much of Chaiten last year.
Another scenario is that the cone could collapse further, and that flows of molten rock and burning debris could reach what is left of the town.
Some Chaiten residents, like 61-year-old mechanic Claudio Hellwig Sundt, who returned to Chaiten in September, is resigned to the resettlement plan.
"If they say we have to leave, then so be it. The experts know best," he said, standing by his workshop that was spared by the volcano last year.
"I'm not afraid of the volcano. I sleep well, and I am relaxed," he added. "But loneliness does scare me. I'd better leave now. Stay here alone? No way."
Editing by Xavier Briand