Residents of a small town in Argentina have been spooked after several sightings of bizarre-looking figure that was captured on video in the middle of the night.

Locals claim the 'creepy gnome' stalks the streets at night. The little 'person' who wears a pointy hat has a distinctive sideways walk was caught on video last week by youngsters who claim to have been terrified.

Teenager Jose Alvarez - who filmed the figure on his mobile phone - told national newspaper El Tribuno that they discovered the creature while playing in their hometown of General Guemes.

"We were chatting about our last fishing trip. It was one in the morning. I began to film a bit with my mobile phone while the others were chatting and joking.

"Suddenly we heard something - a weird noise as if someone was throwing stones.

"We looked to one side and saw that the grass was moving.

"To begin with we thought it was a dog but when we saw this gnome-like figure begin to emerge we were really afraid. I filmed a little and soon all we left running." said Jose.

According to Jose others have now come forward reporting that they too had seen the gnome.

"This is no joke. We are still afraid to go out - just like everyone else in the neighborhood now.

"One of my friends was so scared after seeing that thing that we had to take him to the hospital."

Last October two workers on Belgrano railway line in Buenos Aires reported seeing a "strange and tiny figure". They claim the figure appeared at night, threw stones at them then ran away leaving a 'vapour trail' that 'burned the grass'.