Europe’s “abysmal” treatment of refugee children, who have made up about a third of those seeking asylum on the continent over the last two years, will increase the danger of their later radicalisation and drift into criminality, a damning report from the Council of Europe has said.

A system that allows the sexual and physical abuse of children in overcrowded detention centres, where they are often separated from their families, will only condemn Europe to trouble in the future the report warns.

About 30% of asylum seekers arriving in Europe in the last two years were children, according to a report from the Council of Europe’s special representative of the secretary general on migration and refugees, Tomáš Boček. Nearly 70% of these children were fleeing conflict in Syria, Afghanistan and Iraq.

The number of unaccompanied children who applied for asylum in the European Union reached 96,465 in 2015 and they accounted for almost a quarter of all asylum applicants under 18 years of age.

Yet Boček found a system that was unable to cope with the sheer scale of the numbers, and where separated children were not even being properly registered.

Local authorities were not doing enough to prevent children being forced into slavery, inappropriately treated by the police, or pushed into arranged marriages while on European soil.

Boček told the Guardian: “What these children are going through will define who they will become. And it will also define, in some respects, our common future.

“I saw children who had become upset, yes, and angry. But also apathetic. It makes these children more vulnerable. Perhaps to radicalisation.”

In his report, Boček says efforts to relocate refugee children out of detention centres, including those made by the British government have come to little.

Theresa May faced a storm of protest last month when the British government ended its commitment to provide a safe haven for thousands of vulnerable lone child refugees in Europe after only 350 were brought to the UK.

It had been hoped that as many as 3,000 children would benefit under the scheme conceded by David Cameron in May last year after a public outcry.

Boček says in his report that the original scheme should have been better implemented, and he added that “more should be done”.

The report, based on visits to detention centres and camps in Greece, the former Yugoslav Republic of Macedonia, Turkey, France and Italy, warns: “Migrants and refugees are exposed to violence not only at the hands of smugglers and traffickers, but also as a result of state action and inaction.

“For example, the [special representative] was concerned to learn on one of his missions that children caught vending or begging were arrested and detained.

“This is not an appropriate response: rather, child protection measures should be put in place. There were also allegations of sexual harassment and abuse of children in some camps the [special representative] visited and of disproportionate use of force by the police.”

The report adds: “State actors should ensure that their interventions do no harm to children.

“Additionally, states should work to prevent child labour, such as the exploitation of Syrian children in the textile industry and agriculture.

“States also need to develop appropriate responses to harmful practices and survival strategies such as early and forced marriages, which appear to be an increasing phenomenon.”

The report says that while immigration detention is never in the best interests of the child, migrant and refugee children are “detained and many are separated from a parent who is placed in immigration detention”.

It adds that the the task of addressing the situation of the refugee and migrant children recently arrived in Europe will demand concerted efforts for “many years to come”.

In the short term, Boček says, children will be better served by simply by raising basic standards. He writes: “With regard to minimum living conditions in camps, practical measures such as gender-separate sanitary facilities, better lighting and child-friendly spaces not only make a huge difference for children’s wellbeing, but may also eliminate risks of sexual abuse.”