If you thought The Blair Witch Project was scary, try real life in Burkittsville, where last year's hit horror movie was filmed. The locals reckon that it will turn your hair white in a month.

Since the low-budget film was made, the Maryland town has been inundated with self-styled witch-hunters, trainee exorcists, exhibitionists and assorted weirdos with video cameras. Most were apparently unaware that the movie, about the mysterious disappearance of three film students in Burkittsville's wooded hills, was a work of fiction.

The story's cinéma vérité style seems to have convinced many that Burkittsville is a community riddled with satanic rites. The intruders, from all over the country, have daubed satanic symbols in the churches, cut down town signs with a chainsaw, pranced in the cemetery, urinated in gardens and followed the citizens about as if they were a 24-hour freak show.

All in all, this latest outbreak of cinema-driven hysteria has been a bit too much for the 214 people of Burkittsville. They are mad as hell, and they are not going to take it any more.

As artist Andrea Cox put it: "When you have a bunch of drunken teenagers, tripped out in their best Blair outfits, leaping around at 3am, screaming 'whoooooh' and stomping on grandma, it doesn't go down too well."

So it was not altogether surprising that when a group of producers came to discuss making a sequel to the movie, they were run out of town, in a now infamous showdown between rural earthiness and urban chic at a town meeting on Valentine's day.

"We thought we were going to talk about the trash pick-up," Ms Cox said. "But here were these people with cell-phones, silk scarves and mineral water. A little sleek line of folks who were too good to drink our water."

Cultural misunderstandings turned to abuse. As one of the would-be producers got up to speak about what Blair Witch 2 could do for the town, the mayor's irascible husband, Sam Brown, yelled: "We've already been raped. Now they want us to be prostitutes."

"Then a second person stood up and said pretty much the same thing - get out of town, so they left. Nobody was standing up and saying stay, so they left," said Michael Styer, who runs the Maryland Film Office. "It was not a pleasant thing."

Mr Styer's job is to attract film-makers to Maryland for the benefit of the local economy. In those terms, the Valentine's day verbal massacre was scarcely encouraging, and he does not believe that the Blair Witch producers, Artisan Entertainment, will be back.

"The mayor [Joyce Brown] wrote an apology to us and the company, and said she would like us to come back and reconsider. But I think it's too late. They have alternative spots," Mr Styer said.

If the mayor does indeed want the film-makers to return, there is a serious rift in her family. When Mr Brown answered their telephone this week, he refused to pass the line to his wife. "I hate to tell you but you just wasted your call," he shouted and hung up.

Mr Styer believes that the town, a cluster of 19th century brick and wood houses set in rolling farmland, is failing to make use of a golden opportunity offered by a sequel, which could generate up to $10m (£6.25m) for Maryland. But so far the only sign of entrepreneurial zeal is a couple of T-shirts hung in the window of a local art gallery, inscribed with half-hearted jokes like: "Witch way to Burkittsville?"

For most townsfolk, antipathy to the outsiders has overcome the profit motive. The cemetery where most of the locals have ancestors buried is under police surveillance, following incidents of desecration in which at least one tombstone was upended.

The African Methodist Episcopalian church on the outskirts of the town has been broken into four times since The Blair Witch Project emerged as last year's unexpected movie blockbuster. The church's pastor, Reverend Richard Dyson, said: "They painted a satanic circle on the floor and words on the wall like 'God is dead' and 'the Devil is alive', and things like that." Rev Dyson, however, is not easily spooked.

Curious to see what had driven people to such lengths, he rented a video of the film and watched in bewilderment as the hand-held camera pursued unseen witches and ghosts through the night forest.

"It's just people walking through the woods, talking and cussing, but that's just like life isn't it?" he said. What, he wanted to know, was all the fuss about?