The United Self-Defence Forces of Colombia (AUC), which has been responsible for some of the country’s worst massacres and is a leading player in the drugs trade, promised to start to lay down its arms by the end of the year with peace talks potentially leading to demobilisation of its 10,000 troops by the end of 2005, according to a statement on the Government’s website.

President Uribe welcomed the deal, saying he believed that it could contribute to the country laying the foundation for peace. The move comes after six months of secretive talks with government officials after the AUC declared a unilateral ceasefire last December.

The peace talks are backed by the United States, which is said to have offered $5 million (£3.6 million) for vocational training, farmland and other incentives to paramilitary combatants who agree to disarm.

The group, led by Carlos Castano, was founded in the 1980s as an illegal armed force to combat rural kidnapping and extortion of wealthy landowners and cattle ranchers by left-wing guerrillas.

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The preliminary peace agreement was welcomed by most Colombians, who are tired of the heavy toll of the country’s 39-year conflict, which has cost 20,000 lives in the past three years alone, according to local human rights groups.

Peace with the paramilitaries would remove one important player from Colombia’s drug-fuelled conflict, allowing the Government to focus its efforts on tackling the larger guerrilla forces — the 18,000-strong Revolutionary Armed Forces of Colombia (Farc) and the Army of National Liberation.

A peace deal may not eliminate the AUC, which is deeply split. Some commanders are accusing Señor Castano of selling them out to save his own skin. Experts say that Señor Castano commands 70 per cent of the AUC forces.

For years the AUC operated with broad impunity, often in collusion with military and police commanders. The paramilitaries took the law into their own hands, killing suspected guerrilla collaborators, sometimes punishing entire hamlets. It is estimated to control 40 per cent of Colombia’s drug-trafficking, accounting for 80 per cent of its finances.

Lawyers linked to the AUC have said that its leaders should be eligible for a government amnesty for alleged crimes of murder and trafficking, which they say should be covered as an integral part of the conflict.