Fresh evidence is emerging that refugees stranded in camps across Greece are falling victim to rising levels of vice peddled by mafia gangs who see the entrapped migrants as perfect prey for prostitution, drug trafficking and human smuggling.

Details of the alarming conditions present in many of the facilities comes as the Greek government – facing criticism after the Observer’s exposé of sexual abuse in camps last week – announced urgent measures to deal with the crisis. A further four refugee centres, it said, would be set up in a bid to improve severe overcrowding, a major source of tensions in the camps.

Aid workers say an estimated 58,000 migrants and asylum seekers in Greece are increasingly being targeted by Greek and Albanian mafias. Tales of criminals infiltrating camps to recruit vulnerable women and men are legion.

“If nothing is done to improve the lifestyle of these refugees and to use their time more productively, I see a major disaster,” warned Nesrin Abaza, an American aid worker volunteering at the first privately funded camp known as Elpida (Greek for hope) outside Thessaloniki. “These camps are a fertile breeding ground for terrorism, gangs and violence. It seems like the world has forgotten about them. They are not headline news any more, so therefore they do not exist … but the neglect will show its ugly head.”

With an estimated 55 centres nationwide – including “hotspots” on the Aegean islands within view of Turkey – Greece has effectively become a huge holding pen for refugees since EU and Balkan countries closed their borders to shut them out earlier this year.

In private, many Greek officials express alarm that numbers are growing amid worrying signs that the five-month-old deal signed between Ankara and the EU to keep the flows in check is on the verge of collapse.

Although nowhere near the level of last summer – when at its height 10,000 people streamed into Lesbos in a day – arrivals have risen visibly since last month’s failed coup in Turkey. In the 24-hour period between Thursday and Friday some 261 migrants and refugees – nearly double the normal number – were picked up on islands.

Unable to move on, frustration has mounted among the thousands now stuck in limbo. On the back of uncertainty and anger over delayed asylum processes, marooned migrants say they have become sitting ducks for criminals as they move in. “I never knew a thing about drugs and now I am doing drugs,” said a 17-year-old Syrian youth detained in a camp that stands in a defunct Softex toilet-roll factory on the outskirts of Thessaloniki. “This camp is horrid. We live like animals in tents in burning heat.”

Drugs, he ventured, had become the central cause for violence, with brawls erupting frequently. “The Greek and Albanian mafia come here and push the drugs,” he explained conceding that he financed his own habit by illicitly sneaking into Macedonia, where he bought cartons of cigarettes to sell in the camp. “The police are non-existent. They see drugs, stabbing, fighting and do nothing. They do not care. The world does not care.”

The testimony, which is backed up by human rights groups that have deplored the appalling conditions in Greek detention centres, comes after the EU released €83m (£71.8m) in April to improve living conditions for refugees stranded in the country. The UN refugee agency, the International Federation of the Red Cross and six international NGOs were given the bulk of the funding. Greece by then had already received €181m to help deal with the crisis from Brussels.

Announcing the emergency support, the EU commissioner for humanitarian aid and crisis management, Christos Stylianides, claimed the assistance was “a concrete example of how the EU delivers on the challenges Europe faces”.

“We have to restore dignified living conditions for refugees and migrants in Europe as swiftly as possible,” he said.

But four months later, as allegations of sexual abuse and criminal activity envelop the camps, questions are mounting over whether the money was properly administered. In addition to bad sanitary conditions and lack of police protection, the latest revelations have shone a light on whether the humanitarian system is working at all.

“There is no emphasis on humanity, it is all about numbers,” Amed Khan, a financier turned philanthropist who founded Elpida, told the Observer. Elpida, also established in a former factory near Thessaloniki, has a tea room and yoga centre and, seeing itself as a pioneering initiative, encourages refugees to regard it as a home. In the month since the camp opened its doors, it has won plaudits for being the most humane refugee centre in Greece.

“Nobody is using money here efficiently or effectively,” lamented Khan. “The humanitarian system is the same one that has been in place since the second world war, it lacks intellectual flexibility and is totally broken. The real question to be asked is, has the aid that has been given been appropriately utilised?”