In a forlorn town in the oil-rich Central Asian nation of Kazakhstan, the hospital is jammed with patients. Some are groaning in the wards, recovering from gunshot wounds; others are fed by intravenous drips; one lies in a coma.<?xml:namespace prefix = o ns = "urn:schemas-microsoft-com:office:office" />

This is the Kazakh oil town of Zhanaozen, where clashes between security forces and protesters this month have left 15 people dead. The normally placid country paints itself as a bastion of stability and a haven for Western investors who have sunk billions into its oil and gas sector.

"I was just passing by and people were running at me," said Bekmurat Turashev, a young oil worker recovering from three gunshot wounds sustained when police fired on demonstrators. "There was shooting. I didn't understand a thing."

Hoping to suppress what some have speculated may be Central Asia's echo of the Arab Spring, Kazakhstan's strongman President, Nursultan Nazarbayev, has declared a state of emergency in Zhanaozen. Having brandished the stick, on Monday Mr Nazarbayev tried the carrot, sacking his own son-in-law, Timur Kulibayev, a billionaire businessman involved in the lucrative energy industry who was tipped as a successor to the 71-year-old President.

The streets of Zhanaozen teem with riot police, sent to restore order after an industrial pay dispute that had been dragging on for seven months turned violent. Many of Kazakhstan's citizens feel they have not reaped the benefits of the country's natural resources, and it is that sense of unfairness that erupted into protests this month.

The violence, just before next month's parliamentary and local elections, is an embarrassment not only to Mr Nazarbayev but also to his British adviser, Tony Blair. The former Prime Minister was hired this year to form a team of consultants to provide policy advice. Critics said he was using political spin to prop up a corrupt, autocratic regime. A spokesman for his office said he had played no role in the dispute.

Kazakhstan is not as repressive as some of its neighbours, but the politically savvy President has governed for two decades with an iron fist, quashing all opposition. He took 95 per cent of the vote in this year's presidential elections, though there were accusations of electoral irregularities.

The shells of civic buildings and the torched headquarters of the Ozenmunaygaz energy company at the centre of the labour dispute are testament to the violence that ripped through the town. A poster on the charred façade of Ozenmunaygaz has an ironic message: "Congratulations on the Independence Holiday!" alongside a smiling picture of Mr Nazarbayev.

It was on Independence Day, on 16 December, that the turmoil began in Zhanaozen, 1,250 miles west of Kazakhstan's glitzy capital, Astana. The day was meant to celebrate the achievements of this vast country – the size of Western Europe but with just 17 million people – since it hauled itself out of the debris of the Soviet Union's collapse two decades ago and constructed a nation state powered by petrodollars.

But the dream soured. Tempers flared after the Zhanaozen authorities tried to drive protesters from the town square so that they could stage the Independence Day celebrations there. What happened next is disputed: the official version says police fired into the air after being attacked, and that the casualties were caused by ricocheting bullets. Fifteen people were shot dead (another was killed in a nearby town when protests spread); the hospital treated 75 people for gunshot wounds.

A video posted on YouTube appears to show riot police advancing on retreating protesters – unarmed but hurling rocks – then shooting directly at them. Two fall; police start beating one of them with truncheons. Astana has yet to react to the video – though investigators are trying to find who filmed it. Police claim to have exonerating footage showing themselves under attack – but have yet to produce it.

Those patients in Zhanaozen hospital who agreed to talk denied taking part in the protest, saying they were hit as they went about the town. One young man was shot en route to the mosque; an older man had gone outside to smoke but was struck by a bullet. Some of the patients say their injuries came from police beatings. "I don't know why they beat me up," said an elderly man nursing bruises. "They caught me there on the square and beat me there."

Human Rights Watch has aired "profoundly disturbing" allegations of torture in custody that it says caused one death. Astana has not reacted to the allegations, but authorities have pledged to investigate the violence, inviting UN participation. Mr Nazarbayev has already absolved the police and sacked oil bosses for failing to resolve the industrial dispute, in which nearly 2,000 strikers have been fired.

The President now says the strikers' demands were justified and has promised them new jobs. He has blamed "third parties" for stoking the violence, hinting at the involvement of political foes based abroad. His sacked son-in-law had been in charge of overseeing state assets, including the energy company embroiled in the labour dispute. But Kazakhstan's leaders have so far emerged unscathed, leaving sceptics fearing the inquiry will be a whitewash.

"The political stability in Kazakhstan will be watched closely," said Lilit Gevorgyan, an analyst at IHS Global Insight. "The recent riots will certainly force Nazarbayev to shift his attention from erecting monuments symbolising his legacy to ensuring that the legacy survives once he is out of politics."

Bullets, Beatings & Blair's Brutal Friend In Kazakhstan