A letter sent by an atheist group to Belen, New Mexico calling for the removal of a nativity scene from a city-owned park has riled residents to such an extent that they decided to defy the call by holding the city's biggest Christmas event ever.

Belen officials have launched the "Follow the Star to Bethlehem" campaign to protect the nativity scene and defend religious liberty.

Founded in 1740, Belen is Spanish for Bethlehem.

The Freedom From Religion Foundation (FFRF) first sent a letter to Belen last summer asking the nativity scene be removed from the Theresa Tabet Park, which is across the city hall, according to KOAT TV and Gospel Herald.

Belen Mayor Jerah Cordova said despite threats of a lawsuit by the group, he's not aware of any court filings.

"They sent a couple of letters and pretty much left the issue alone up to this point, so we're pretty satisfied about that. We stood strong, we stood tall and will continue to do so as a community and we'll continue to celebrate who we are," he said.

He and the pastors who coordinated Saturday's "Follow the Star to Bethlehem" event, said the FFRF's efforts backfired.

People packed the parking lot outside the city hall for the Bethlehem recreation and there were performances of the play "The Nativity" with the help of the choir and orchestra from the First Baptist Church of Los Lunas.

"One of the things about this organisation that I don't think that they fully understand is when they send a letter like that, all they're doing is riling people up and getting them to express support more than they ever have before for things like this," the mayor said.

Re-enactors wore clothes like those worn in the first century. Twelve pastors from different churches organised the event.

"People are concerned about their freedom of religion and so in response we're trying to stand up and say we're not going to go in a corner and hide any more. We're going to stand up and proclaim what we believe," said Senior Pastor Ray Jaramillo. "[The FFRF's goal] backfired and I think riled up the Christian community to come out and support our religious freedom."

The event was supported by Samaritan's Purse president Franklin Graham who posted on Facebook: "The infamous Freedom from Religion Foundation picked the wrong town to mess with this time. It's about time we as Christians get 'riled up' about our religious freedoms! We need to stand up for the things of Jesus Christ and God's Word. Way to go Belen!"