One by one, the bereaved start to take their loved ones home

Jalan Legian, Kuta's brash and bustling main drag, was a forlorn sight last night, its surfwear shops empty, its cafés and clubs deserted. In Peanuts, one of the most popular bars, the only customers were two Balinese men morosely cradling bottles of Bintang beer.

A week ago, Jalan Legian pulsated with a noisy, throbbing energy, its pavement crowded with Saturday night revellers, the air pierced by a cacophony of horns as traffic crawled along the congested street. Then came the bombs that flattened two nightclubs, ripping the heart out of Kuta and leaving more than 180 people dead.

Kuta, Bali's principal resort, is blanketed in gloom. The hotels are three-quarters empty and the few remaining tourists look tense and oppressed. The majority of surfers and package holidaymakers have left, to be replaced by Australian police officers helping the investigation, and bereaved relatives waiting for bodies to be released.

The first of more than 100 Australian victims was repatriated yesterday. Distraught family members accompanied the body of Angela Golotta, 19, to Adelaide. She was dancing in the Sari Club when the bomb went off.

Most of the dead were in the Sari Club, one of Kuta's best-known nightspots; a minivan packed with plastic explosives was left outside. All that remains of the nightclub is an enormous crater. Diagonally opposite on Jalan Legian, the concrete skeleton of Paddy's Irish Bar still stands; in the back yard, beer bottles are melted together in a grisly sculpture.

A small bomb is thought to have gone off first inside Paddy's, drawing people out into the street where they received the full force of the second, devastating blast outside the Sari. Where hawkers once flogged trinkets, enormous paper wreaths now line Jalan Legian, propped up against the wall on both sides of the street. White banners strung between trees have become a noticeboard where people vent their grief in English and Bahasa. "How could this happen here?" one passer-by had written. Another stated: "I want my Bali back."

Dozens of schoolchildren in brown and beige uniforms milled around outside the police line that seals the bomb site. They lost friends inside Paddy's, which was popular with local teenagers, and were waiting to take part in a Hindu ceremony nearby. "I want to kill the terrorists who killed the people," said Wiwin Saputra, 17.

His anger is shared by many, and there was a time last week when it appeared that Bali's minority Muslims – mainly traders from Java – might suffer a backlash. Hindu community leaders went to Muslim homes, demanding to see identity papers and asking whether strangers were staying. But revenge is not the Balinese way, and the visits soon stopped.

Many locals, their livelihoods dependent on tourism, are staring penury in the face. The restaurants and handicraft shops are empty. "We have to find an alternative way to earn money, perhaps selling fruit and vegetables to the markets," said one trader.

Ten young men in white T-shirts were sitting on the steps outside K-Mart, a clothes shop wrecked by the bomb. They were waiting for word on whether they still had jobs. Balinese employers hate firing staff, whom they regard as part of their family, but many workers are already being laid off.

On the long, sandy beach that is Kuta's best asset, a couple of Balinese teenagers played ball and a stray dog lay in the shade. The sun went down in a riot of glorious orange; Kuta sunsets are legendary, but no one is watching them any more.