THEY call it "El Guiso"– the stew.

Depending on the height and weight of the victim, it can take a long time for a body to melt in the flaming diesel of a 55-gallon drum. Then there were the severed human heads rolled on to a crowded nightclub dancefloor, and the victim whose face was sliced off and stitched to a football before it was dumped with an attached warning note to rival gang members: "Happy New Year, because this will be your last."

Welcome to the gruesome world of Mexico's drug wars, a place where torture and killing have become so commonplace that the gunning down of five policemen in a neighbourhood street barely makes a few paragraphs in a local newspaper. On this frontline the brutality knows no bounds, and its perpetrators, Mexico's drug mafias, notably the Los Zetas and Sinaloa cartels, have created a violent insurgency the impact and influence of which the likes of al-Qaeda or the Taliban could never hope to match. A staggering 50,000 people have died in Mexico's narco wars in the past six years.

"It's getting worse all the time, executions, decapitations, the melting of bodies ... annihilate and terrorise. And the really bad thing is you get used to it," says Leonel Aguirre, head of the independent Sinaloa Human Rights Defence Commission which monitors these daily atrocities.

Over the last two months alone, 122 decapitated or dismembered bodies were found in different areas of the country, a particularly grisly period even by Mexican standards, as the country last week went to the polls to vote for Mexico's president-elect, Enrique Pena Nieto, who is due to take up his post in December. The election of Mr Pena Nieto, a member of the country's Institutional Revolutionary Party (PRI), has not been without controversy.

It's a measure of just how much corruption is perceived to have penetrated every aspect of Mexican society that its Federal Electoral Institute decided to recount more than half the ballot boxes used in the presidential election after finding inconsistencies in the vote tallies.

Second-placed candidate in the election, Andres Manuel Lopez Obrador of the Democratic Revolution Party, has now said he will mount a legal challenge to the result in an effort to prove that illicit money was used to buy votes and secure Pena Nieto's victory. While question marks remain over the election's legitimacy, one thing few doubt is that other far more insidious and dangerous players have cast a shadow over the polls.

There is virtually no area of Mexican society untouched by the tentacles of the drug cartels. Across Mexico, the Los Zetas and Sinaloa now control huge swathes of territory, including large cities such as Ciudad Juarez. They have countless politicians, police and judges on their payroll. The fate that befalls anyone opposing them is horrendous. Only last month the torsos of 43 men and six women were found piled by the side of a road near Monterrey.

Los Zetas cartel henchman Daniel Elizondo, nicknamed "El Loco", is said to be behind their murders to send out a message about who controlled this drug-smuggling route near the US border.

Faced with these levels of intimidation, police officers in many areas of Mexico have simply stopped doing their job – and God help any journalist who pokes an investigative nose into 'narco' business.

But just who are these shadowy, violent cadres some say are ripping Mexico apart? How are they able to make parts of the country virtually no-go areas for the Mexican police and army? And to what extent is their network of criminal activity spreading into neighbouring US, where some intelligence and law enforcement officers seriously doubt that president-elect Pena Nieto can make good on his promise to crack down on the cartels?

They have a saying in Mexico: "plata o plomo". Translated from Spanish, it means "silver or lead". For someone unlucky enough to be presented with the expression, it usually means they face an unpalatable choice: take a bribe or a bullet.

In this arena of unbridled corruption and bloodletting, one Mexican drug cartel has in recent years risen above the rest: Los Zetas. Taking its name from the radio code "Z" used by high-ranking officers in the Federal Judicial Police who were nicknamed as the letter in Spanish, the cartel was formed in 1998 by 14 former soldiers of Mexico's elite Grupo Aeromóvil de Fuerzas Especiales (Special Forces Airmobile Group). They formed alliances with groups south of the Mexican border, including Guatemala's jungle warfare specialists, Los Kaibiles, who were associated with widespread cruelty and torture during the civil war there.

Today in Mexico the Zetas command more than 10,000 gunmen from the Rio Grande, on the border with Texas, to deep into Central America. Considered the most brutal and violent of the cartels, their rapid expansion has displaced Mexico's older cartels in many areas, giving them a dominant position in the cross-border drug trade. According to the US Department of Justice, the Zetas now command the lion's share of an illicit trade in cocaine, methamphetamine and heroin thought to be worth between $18 billion and $39bn annually in North America alone.

Such phenomenal profit is the kind of financial resource many terrorist organisations can only dream of. It also ensures an army of hitmen, assassins and neighbourhood foot soldiers equipped with state-of-the-art technology such as assault rifles, rocket launchers, satellite communications and parts to build improvised submarines able to ferry drugs along coastlines.

Mexican police officers and soldiers on the frontlines say the Zetas have more in common with insurgents than traditional gangs.

"They act like urban guerrillas," said Florencio Santos, a former soldier and now police chief in Guadalupe, a town on the southern outskirts of Monterrey. "They'll make a phone call to get the police out, then block the street in front of the patrol cars and open fire from the front and the side."

Research by Mexico's organised crime unit, SIEDO, has found that the Zetas now control more territory than the nation's oldest and wealthiest trafficking organisation, the Sinaloa cartel, led by Joaquin "Shorty" Guzman. Operating from their stronghold in north-east Mexico, the Zetas lay territorial claim over some of the most sought-after trafficking routes into the US. It's estimated that more than 8500 trucks cross into Texas daily from the border city of Nuevo Laredo, twice the number crossing from Tijuana or Ciudad Juarez.

However, illegal economic clout aside, it is their propensity for bloodshed that has made the Zetas notorious – and feared. Among the many atrocities carried out by their 'Sicarios' – hitman squads – was the massacre of 72 foreign migrant workers heading for the US, and the setting a fire in a casino that claimed 52 lives.

Because of this intensity of violence and the Zetas' disregard for civilian life that break the unspoken codes of older traffickers, the cartel is recognised as posing the biggest challenge to the Mexican government.

"The Zetas have created a new model of organised crime and unleashed new levels of violence to try to unseat the older cartels," said Mike Vigil, the former head of international operations for the US Drug Enforcement Administration. "This has destabilised many areas of Mexico."

Security analysts say that, as the Zetas have grown in influence, their ranks have been filled with young thugs, many of whom are almost rogue in their behaviour and near impossible to control.

"These new players ... are doing things that might not be sanctioned by the leadership," said a senior US law enforcement official working in Mexico, speaking on condition of anonymity.

"Their outrageous behaviour has made them the big target of the government," added the officer in an interview with Ioan Grillo, a British journalist who has become a leading expert on the cartels the subject of his acclaimed book El Narco: Inside Mexico's Criminal Insurgency.

The brutal acts carried out by these young psychopaths is often accompanied by narcomensajes (narcomessages), usually banners left by the perpetrators at the crime scene.

Narcomensajes may contain warnings to rivals and enemies, lay claim to territorial control or make threats to the media. They are always aimed at intimidation or compelling the authorities to change policies.

Such is the prevalence of cartel-inspired violence in almost every sphere of Mexican society that it has also given rise to a narcocultura – a value system glorifying brutal violence and adding a spiritual meaning to actions such as ritualised killings, beheadings and torture. According to Antônio Sampaio, a research assistant at the International Institute for Strategic Studies, some cartel members have even developed a spiritual interpretation of criminality, associating their methods with cults of folk saints not recognised by the Catholic Church, such as Jesus Malverde (Angel of the Poor) or La Santa Muerte (Saint Death). In the past few years decapitated bodies, heads burned in ritualised fashion and bowls of blood have been found near shrines to La Santa Muerte.

Watching this spiral of violence closely is Mexico's giant neighbour, the United States. In the wake of Mexico's presidential elections, a nervous US administration and security apparatus will no doubt be monitoring President Pena Nieto whose PRI party ruled Mexico for most of the twentieth century until 2000 – a time during which the cartels' power soared amid widespread corruption and weak institutions.

Many in the US State Department, the country's Drug Enforcement Administration (DEA) and at CIA headquarters at Langley are already wondering whether Mr Pena Nieto's election might be the start of a Mexican presidency tempted to cut deals with its mafia to reduce violence in exchange for turning a blind eye to drug shipments or cracking down on cartel kingpins.

US fears are understandable because, unlike American mafia gangs, Los Zetas, with its unlimited funds and access to weaponry, has the capacity to wreak criminal havoc on US soil. The FBI estimates the cartel has already penetrated hundreds of US cities by using local criminal gangs as proxies, and it is likely to have links with listed terrorist organisations.

For Mexico itself the implications of a continued drug war at the current levels are profound. For example, just where do the billions of dirty drugs dollars go to? As Grillo, who has made some of the most detailed coverage of the cartels has highlighted, bankers believe it helped keep the peso afloat during the world economic crisis from 2008 to 2009. For Mexico, fears over uncontrollable narco power has led to concerns that it may become a failed state. But, as Grillo says, perhaps a more accurate prediction would be the possibility of "state capture" whereby "drug oligarchs and mafia capitalists seize control of chunks of state apparatus" as happened in Eastern Europe.

For the time being the scarcely believable brutality connected to the narco war will continue on Mexico's streets and many innocent people will be caught in the crossfire.

One Mexican school guidance counsellor who deals with students affected by the violence described recently how one female student told him about a neighbour who was tortured, shot, hung and burned by cartel hitmen.

"The student told me how they left the victim's heart in a box for his wife," the counsellor recalled. "They know how to make you suffer," the student insisted.