Migrants in Greece are set to be handed envelopes of cash under a £550million EU disaster fund announced yesterday.

Brussels officials said despite the obvious dangers of giving taxpayers’ money directly to those in refugee camps to spend as they wish it would help them ‘maintain their dignity’.

The EU aid plan – the first of its kind to provide humanitarian relief inside the continent - will be used to help charities provide essentials such as medicines, blankets and food.

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Migrants in Greece are set to be handed envelopes of cash under a £550million EU disaster fund announced yesterday. Above, refugees and migrants wait at the borders between Greece and Macedonia

The EU aid money will be used to buy medicines, blankets and food for migrants arriving in Greece in their tens of thousands across the Aegean sea from Turkey

But Christos Stylianides, the Commissioner in charge of humanitarian aid, said he believed migrants should also have the option of buying things themselves rather than being forced to queue up for aid drop-offs.

His suggestion comes despite internal European Commission documents warning about ‘corruption and security risks’ when providing humanitarian assistance in cash.

Tory MEP David Campbell-Bannerman last night said: ‘There is a danger that by handing over cash rather than basic essentials, British taxpayers’ money could end up in the hands of the human traffickers smuggling people through Europe. This is no way to ensure our security in Britain.’

People smugglers are currently offering for 1,000 euros to help migrants make the 375 mile trip from the Greek border with Macedonia to Belgrade in Serbia, where they can pay an extra 1,000 to 3,000 euros to get to Vienna.

The European Commission yesterday launched the 700million euro (£550million) humanitarian disaster relief fund that will be paid for using existing resources in the EU budget.

The aid plan from Brussels officials is the first of its kind to provide humanitarian relief inside the continent. Above, refugees and migrants - mostly from Afghanistan - wait in queues to receive food distributed by the Greek army at a transit camp in the western Athens suburb of Schisto

When EU countries are overwhelmed by major crises – such as the current migrant crisis – the money will be spent through charities and aid organisations such as the Red Cross.

Groups working in Greece, where tens of thousands of migrants are currently stranded, are expected to be the first to be allocated funds from the new pot.

Mr Stylianides said there were different ways the Commission could ‘help refugees on the ground to make sure they can survive and have the best possible living conditions’ including through giving cash or vouchers.

He said: ‘I believe that in Greece, given that it is a European country that has a certain degree of a good functioning of the banking sector, we could apply the cash and voucher procedure.

‘It is my own personal view that the cash and voucher procedure will prove particularly helpful in this case and it is an important option being given as it ensures dignity for refugees, while helping local communities because they will be selling their own goods and services.’

Commission documents suggested the money could be distributed through cash in envelopes, mobile phone transfers or bank account deposits.’

Christos Stylianides, the Commissioner in charge of humanitarian aid, said he believed migrants should also have the option of buying things themselves rather than being forced to queue up for aid drop-offs

An EU official admitted the failure of the Commission to handle the crisis meant it was having to set up the type of fund usually reserved for easing humanitarian crises in places such as Africa.

‘For the first time in its history the EU is struggling to deal with wide-ranging humanitarian needs within its borders,’ he said.

‘The Commission wants to learn the lessons from this crisis and prepare for the next one. We should not be caught off guard again whether we have a different or similar crisis that triggers humanitarian needs.’

European Commission Jean-Claude Juncker last night said he was ‘not only concerned but really worried’ about the situation in Greece where around 30,000 people have been stranded after neighbouring countries introduced border restrictions to preventing them from continuing to other parts of Europe.

Greek authorities have asked for around 480 million euros from Brussels to help shelter 100,000 migrants.

At least 11,000 people are camped on the border with Macedonia at Idomeni where numbers are quickly building as only a few hundred are being allowed through each day.

An EU official admitted the failure of the Commission to handle the crisis meant it was having to set up the type of fund usually reserved for easing humanitarian crises in places such as Africa

Aid groups have reported a shortage of food and tents, warning that the wet weather is taking its toll on the migrants, including children.

Antonis Rigas of Medicins Sans Frontieres said: ‘Conditions are very bad. We worry that if it exceeds 12,000 the situation might get out of hand.’

Turkey, which has been offered 3billion euros by EU countries to stem to influx into the continent, yesterday started taking back economic migrants from Greece with four coach loads carrying 308 Moroccans, Tunisians and Algerians the first to be sent back.

Officials in Ankara said it was ‘out of the question to immediately stop’ the flow of migrants, adding: ‘There's no magic wand in our hands’. But they said they were ready to sign agreements with 14 EU countries to take back failed asylum seekers.

European Council president Donald Tusk, who will chair a meeting of Turkey and the 28 EU countries on Monday, yesterday said he would press the Turkish government for ‘a more intensive engagement’ in the migrant crisis.