Halloween, Mexican-style ... children play at the cemetery in Rio Bravo, Mexico, during the Dia de los Muertos celebrations. They were visiting the grave of a cousin who died at birth. Picture: Kirsten Luce/AP

Patrick Steel travels to Mexico for the Day of the Dead celebrations and finds the locals determined to hold on to their traditions - even if their ancestors may not have approved of the music

In Mixquic, a small town on the south east fringe of Mexico's Distrito Federal, accompanying a troupe of dancers dressed in feathers and sporting ghoulish painted faces, the drumming was enough to raise the dead. But that was the point.

At midnight on Wednesday, the people of Mixquic began the ceremony for welcoming back the spirits of their ancestors. Although a cynic might note that a good number of locals were more interested in welcoming the pesos of the thousands of tourists, mainly Mexican, that descended on the town to observe the traditions of el Dia de los Muertos or day of the dead: a two-day festival which culminated at midnight last night with a candlelit vigil in the town's cemetery.

The atmosphere around the town over the two days is more fiesta than sacred ceremony, with a plethora of stalls selling everything from tacos to handmade pottery, while children dressed in Halloween costume beg for pesos and sweets from passers-by. Many people look the worse for wear because of the michelada, a potent mix of beer, hot sauce and, sometimes, a drop of tequila.

On the edge of town, boats garlanded with flowers ferry people along the river, gliding through the murky water in peaceful contrast to the competing sound systems, which blare out of marquees along the banks. One marquee was playing the Bee Gees: Stayin' Alive. Hopelessly inappropriate or a healthy riposte to the morbid theme of the festival, depending on your point of view.

But alongside the party atmosphere there is a powerful religious sentiment and a genuine struggle to hold on to a tradition that is in danger of being "gringoed" by the invasion of Halloween costumes and other unrelated consumer miscellany. A puppet show in the town square depicting the history of the day of the dead in Mixquic included a character who summed it up by saying: "We don't want to lose our traditions. We don't want to forget our past. And that is why we celebrate the Dia de los Muertos." At the time it seemed like a portentous claim, but later it made more sense.

Wandering away from the crowds and the music, we encountered a woman who ushered us into her house to look at the shrine she had created in her living room, replete with offerings of tequila, bread, flowers and packets of cigarettes (the dead evidently live a fairly unhealthy existence). The three large dolls at the centre of the shrine represented deceased members of her family, she said, as she offered us pan de muertos, a sweet bread made especially for the festival. She would keep the candles around the shrine burning all night so that the spirits would find their way home, she told us. "Come back and visit us again later," she said. "We won't be sleeping tonight."

Even the most jaded cynic would be turned by this sort of encounter, but any further doubts about the sincere motives at the heart of the festival were utterly dispelled last night as the townspeople gathered in the cemetery to light candles and sit at the graves of their ancestors, welcoming the spirits back.

Some graves hosted entire families while others were occupied by old ladies tightly wrapped in ponchos who stared impassively at the tourists picking their way around the stones. Flower petals were scattered around the cemetery, votive candles flickered in the breeze giving the night a golden glow, and smoke from the burning incense drifted around the graves.

Witnessing the vigil was both utterly beautiful and very moving. So much so that for a while you could forget that outside the walls the Village People were chanting YMCA through a souped-up amplifier.