By Simon Gardner

BATTICALOA, Sri Lanka, March 10 (Reuters) - Residents in swathes of Sri Lanka's war-ravaged east voted for the first time in more than a decade on Monday, but with armed former Tamil Tiger rebels seen as the likely poll winners peace remains precarious.

The local elections are seen as a dry run for a wider provincial vote in the north and east -- the government's blueprint for devolution in minority Tamil areas it hopes will go hand-in-hand with its push to win a 25-year civil war.

"Our prayer is for calm and no war," said 53-year-old Alagaiah Kouindasamy, displaced as the Sri Lankan army recaptured areas of the lush district of paddy fields, scrub jungle and lagoons from the Liberation Tigers of Tamil Eelam last year.

"Because of the conflict we were displaced, lost our livelihoods. There was tension and fear, artillery was being fired. We just want normalcy."

Rights groups and diplomats have questioned the government's decision to endorse in the elections a breakaway rebel faction, the TMVP, which helped it defeat the Tigers in the eastern district of Batticaloa. The group is accused of abuses such as child soldier recruitment, abductions and killing.

Pradeep Master, Batticaloa political wing leader of the newly-registered party, is a former Tiger who joined the rebels as a child soldier. He is tipped as Batticaloa's next mayor and is running on a ticket with the government.

A host of other former militant groups who joined the democratic mainstream in the 1980s are also taking part in the poll, as well as the island's main Muslim party.

As the polls for one municipal council and eight local government bodies opened early on Monday, thousands of troops and police stood guard at razor wire checkpoints and patrolled in armoured vehicles for fear of Tiger attacks or internecine violence.

LIVING UNDER THE GUN

Ordinary Tamils repeatedly displaced by a war that has killed an estimated 70,000 people since 1983 -- some displaced yet again by the 2004 tsunami -- long for lasting peace.

But the TMVP's Tiger heritage is never far away. Like the mainstream rebels, its emblem is a roaring golden Tiger baring its claws against a red background. The party has replaced the Tigers' crossed rifles with a pair of shaking hands.

Pradeep says his group's weapons have all been stored in the jungle and will be given up after the poll, and denies accusations of abuses.

"They are baseless," he told Reuters in an interview on Sunday at his party's headquarters in Batticaloa. "Our members were being killed. Because of that, we used weapons. When our political right is confirmed, we will hand them over."

President Mahinda Rajapaksa's government has long-refused to disarm the TMVP, arguing it could not find anyone carrying guns to disarm -- despite the fact residents and aid workers could until a few months ago.

Increasingly isolated by an international community alarmed at its decision to formally scrap a 6-year truce and aggressively take the war to the Tigers, rights groups accuse the state of complicity in abuses, creating a culture of impunity and even of being behind disappearances.

The TMVP's armed fighters are now conspicuously absent from the streets. But a clutch of other former militant groups-turned-political parties are taking part, and the threat of the bullet has overshadowed the ballot.

"In Batticaloa, not only TMVP, many other armed groups are also there. Some of the Muslims also have arms," said Kingsley Rodrigo, chairman of the People's Alliance for Free and Fair Elections, the island's main election monitoring body.

"They are not using arms to campaign, but they have been keeping the arms with them. So I am not going to say this election is a free and fair one," he added.

"But under all the circumstances, the election's going to happen, and big violence has not taken place as expected. That is the amazing thing." (Editing by Alex Richardson)

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