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Dozens more people, mostly prisoners, were killed and the streets of Brazil's business capital gripped by fear yesterday as a crime wave of unprecedented violence swept over Sao Paulo for a third night, taking the overall death toll to more than 70.

Members of the PCC, a notorious criminal gang known throughout the state as the First Command of the Capital, torched buses and hurled grenades at police stations as they stepped up their attacks, called a "barbarous civil war" by human rights groups. Tens of thousands of commuters, mostly impoverished workers, were unable to get to work yesterday as bus companies suspended operations and armed police manned checkpoints on main roads.

Prison riots provoked last week by the transfer of more than 700 prisoners to solitary confinement in a high-security prison showed no sign of abating, with inmates fighting security forces at 45 detention centres and jails and holding hundreds of people hostage. Eight guards have been killed.

"It's getting out of control here," said Maria Marta Iinuu, 37. "Everyone is wary, scuttling between home and work, hoping to get indoors safely. It's worse than ever."

Since Friday night, Sao Paulo has seen the worst spate of violence in the state's history since the attacks began on Friday. The PCC, a powerful gang rooted in the state's prison system, has used its footsoldiers, known as "Bin-Ladens" or "Lizards" to kill policemen, civil guards, prison guards, firemen and civilians. Prisons havebeen torched and numerous hostages taken as masked gangs parade the rooftops. Sao Paulo's infamous jails are the unenviable home to roughly half of all Brazil's prisoners, and the numbers in the state are growing by 1,500 every month.

The violence is a response by the PCC to a decision by the State Penitentiary Administrator, Nagashi Furukawa, to move 765 of its members and their leaders to a secure location, hoping it would act as a deterrent for planned rebellions. The decision backfired spectacularly. Day and night, guns, grenades and homemade bombs have been used in about 120 co-ordinated attacks by gangsters.

President Lula da Silva yesterday called an emergency meeting to discuss ways of containing the wave of terror, offering to deploy federal police and army support to Sao Paulo's state governor, Claudio Lembo. But the offer was refused by Mr Lembo, a member of the opposition party, who claims the situation is "under control". Instead, negotiations with PCC leadership continued. They are demanding that disciplinary procedures are changed and 60 televisions are delivered to the prisons so inmates can watch next month's World Cup.

Through Sunday night and into the early hours of yesterday morning more than 60 buses were torched by masked armed criminals who evacuated passengers first. Fearful drivers and bus owners stayed off work, bringing the commuter population to a standstill. "The people affected by this don't have money for taxis, the rich are driving their own cars or staying at home, it's strangely quiet on most roads," complained 64-year-old Pedro Guimaraes.

The PCC is a highly organised criminal faction originating in 1993 inside jails and focused on defending prisoners' rights. Within years it was hijacked by a wider criminal network, operating similarly to the Italian mafia, according to Walter Maierovitch, a retired Sao Paulo judge, drugs expert and head of the Giovanni Falcone Brazilian Institute of Criminal Science. "They have access to top-of-the range communications networks include cellphones and computers, they are housed together in the same jails and so are able to mobilise twice as fast as any state organ. They will always be one step ahead until that link is broken."

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