Italy’s mafia clans, best known for drug running and extortion rackets, are earning €20 billion a year by turning the south of the country into a toxic waste dump, an environmental organisation said in a major report.

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Heavy metals and cancer-causing organic compounds are being illegally buried with increasing frequency, often in agricultural areas or on land that is used to build new homes, the Legambiente group warns.

The dangers to human health were dramatically illustrated when contaminated farmland outside Naples was blamed for the discovery of toxic dioxins in the region’s prized buffalo mozzarella cheese in 2008.

And the escalating risk is underlined by the new report which shows that last year the authorities seized a record two million tonnes of dangerous waste on its way for disposal, often in the one of Italy’s four southern-most regions, Sicily, Calabria, Campania and Puglia where the country’s four main mafia groups hold sway.

Enrico Fontana, Legambiente’s spokesman on environmental and organised crime, said the figure was just the tip of the iceberg. “There was a lot more that was not intercepted,” he said. “And this market makes the mafia huge amounts of money. And the amount they earn from it is growing,” he said.

At the latest count, in 2010, around 31,000 environmental crimes were committed, the report says, with 41% of them involving illegal waste disposal and recycling of cement.

Campania, the region around Naples whose streets are perpetually carpeted in piles of stinking garbage, is the worst-hit part of the country, it is claimed. The local mafia, the Camorra, is frequently blamed for exacerbating or even causing the rubbish crisis – by encouraging the closure of official incineration plants – in order to fan demand for its illegal dumping services.

The Camorra’s role was underlined today by the arrest of Naples-area businessman Ludovico Ucciero for allegedly helping local mobsters enrich themselves through control of garbage removal and incineration. Mr Ucciero runs four rubbish removal companies, which have been seized by authorities.

Campania is followed in the environmental abuse stakes by Calabria, home to the powerful 'ndrangheta crime syndicate. Then comes Sicily the base of Cosa Nostra, and Puglia, the home of the Sacra Corona Unita crime group. The four southern regions together accounted for 45% of the overall environmental-crime tally.

But Mr Fontana warned that it was not only Italy’s south was under threat from toxic dumping. “It’s happening now in Lombardy (the region around the northern city of Milan). ‘ndrangheta is dumping toxic waste there in or at places where homes and offices are being constructed,” he said. “The Ecomafia is a virus that poisons the environment, pollutes the economy and endangers people’s health.”

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According to the report, Italy was the also “the crossroads for the international traffic in dangerous waste and radioactive material coming from other countries that was destined for, via sea, Africa and Asian countries”.

Legambiente said illegal building was another environmental blight that was on the rise, with 26,500 properties illicitly constructed last year. Mr Fontana said that as a result “parks and countryside and other places an area the size of 540 soccer pitches has been stolen”.

Sometimes hideous, concrete monsters sprout up to despoil some of Italy’s most beautiful coast and countryside. Earlier this year, four people were arrested in connection with the illegal construction of the eight-storey “Ecomonster” at Sant'Agata in Puglia.

Illicit and shoddily constructed homes, using poor quality cement, are also prone to collapse, as was the case with the student dormitory that subsided during the 2009 L’Aquila earthquake killing eight students.

Mr Fontana said the Italian government should introduce as a matter of urgency more severe penalties. Currently only one activity, organisation of illegal waste trafficking, has the status of a serious crime that can be punished by longer jail terms and investigated by wiretaps. “The act of dumping poison and polluting streams and the air,” should also be classified in this way,” he said.

Making a killing from the environment

1. Mozzarella

In March 2008 the Italian government recalled from sale buffalo mozzarella cheese made by 25 producers in the Campania region near Naples, after they were found to contain high levels of the dangerous chemical dioxin. Toxic waste, illegally dumped by criminals on agricultural land used for pasture, was blamed.

2. Toxic ships

Authorities in Calabria fear that ‘ndrangheta mobsters have deliberately sunk ships carrying toxic or radioactive cargoes of the region’s coastline it order to make money from the insurance claims. Legambiente has said that 30 or more such ships, may have sunk off the Calabrian coast in suspicious circumstances in the past two decades.

3. Wind power

In September last year it emerged that Cosa Nostra was attempting to cream off millions of euros from both the Italian government and the European Union, by snatching the generous grants on offer for investment in wind power. Police seized mob assets – worth €1.5bn (£1.25bn) – from the Mafia-linked Sicilian businessman Vito Nicastri, who had vast holdings in alternative energy concerns