It was a cry, raw and anguished, that pierced the convivial party atmosphere and laid bare the sense of anomie gnawing away at South Africa.

The archbishop emeritus Desmond Tutu had an emotional outburst on Monday night as he castigated politicians for greed, failing schools and the "nightmare" of the Marikana mine massacre. His impromptu speech shocked guests at a book launch in Cape Town, according to local media reports, which said a "chatty audience" including senior government officials was immediately silenced.

Reports vary on his exact opening words, but a spokesman for Tutu indicated that he shouted: "What the heck are you doing?"

Beeld newspaper then quoted a highly emotional Tutu as saying: "I am 80 years old. Can't you allow us elders to go to our graves with a smile, knowing that this is a good country? Because truly – it is a good country."

Tutu, a Nobel peace laureate described as the moral conscience of South Africa, has not been afraid to criticise the governing African National Congress (ANC), for example over the refusal to grant the Dalai Lama an entrance visa.

On Monday he was at the District Six museum for the launch of the struggle veteran Michael Lapsley's book Redeeming the Past, along with guests including Marius Fransman, the deputy foreign minister, and other high-ranking figures.

Lapsley was an ANC chaplain who lost an eye and both hands to a parcel bomb sent by the apartheid regime. Later, speaking from the podium, Tutu expressed frustration at the betrayal of such sacrifices after the dawn of multiracial democracy in 1994.

"Is this the kind of freedom people were tortured and people were maimed for?" he was quoted as saying. "I ask myself, why were we in the struggle? The highest price was paid for freedom, but are we treating it as something precious?

"How can we have children 18 years later who go to school under trees and whose education is being crushed without textbooks and no one is held accountable? Have we so quickly forgotten the price of freedom?

"People are going to sleep hungry in this freedom for which people were tortured and harmed … It is difficult to believe people are getting such money and benefits, and are driving such flashy cars while the masses suffer in cramped shacks."

He criticised those who enrich themselves where ministerial rules allow them. "It's legal, but is it moral?" he reportedly asked. "Please, please, please, come to your senses."

Tutu said the shooting at Marikana reminded him of events under apartheid.

"In 2012? In a democracy? In a new South Africa? Have we forgotten so soon? Marikana felt like a nightmare, but that is what our democracy is in 2012."

The Marikana tragedy, in which police gunned down 34 striking mineworkers, has been described as probably the lowest point in South Africa's short post-apartheid history and prompted much soul-searching in the economically divided nation.

Earlier this week, Tutu caused controversy when he accused Tony Blair and George Bush of lying over weapons of mass destruction in Iraq and called for them to answer charges of war crimes.