The European commission has pledged to give €80m (£58m) to Greece to help house refugees through schemes including an apartment rental programme, hotel vouchers and subsidies to families who will host refugees.

The scheme, announced in Athens on Monday, aims to provide 20,000 additional reception places to the country on the frontline of Europe’s migration crisis. Asylum seekers and candidates seeking relocation elsewhere in Europe will be eligible.

“Today we stand in solidarity with Greece and with children, women and men seeking refuge in Europe,” said the commission vice-president Kristalina Georgieva. “The scheme we are launching offers EU budgetary support for families, notably providing them with adequate shelter.”

Greece has seen more than 790,000 men, women and children land on its shores since January. Almost all wish to continue their journey north, through the Balkan peninsula to central Europe. But the decision of several countries along that corridor to close their borders to anyone deemed not to be from a conflict zone has left thousands stranded.

Violence has punctuated chaotic scenes along Greece’s border with its northern neighbour Macedonia.

Labouring under its worst economic crisis in modern times, Athens has scrambled to host the arrivals in sporting venues erected for the 2004 Olympic Games, in camps on Greek islands and in tents in public squares.

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Tensions have risen noticeably as Moroccans and other economic migrants, temporarily sheltered in an estwhile Olympic taekwondo venue, have protested against conditions and demanded to be allowed to continue their journey onwards into Europe. In a nation racked by plummeting living standards and recession, the prime minister, Alexis Tsipras, and other officials are increasingly voicing fears that Greece will become a “repository of trapped souls” desperately trying to move west.

The taekwondo venue has to be vacated by Wednesday for an international sporting event. The alternate minister for migration, Yannis Mouzalas, conceded that authorities still had “no idea” what to do with the migrants who are housed there.

“They will go somewhere similar but we don’t know where,” he said. Compounding the leftwing government’s problem, mayors in boroughs with installations big enough to shelter migrants have refused outright to allow them in, reflecting growing impatience and security concerns at a local level.

Under the new housing scheme, Greece’s ability to shelter migrants will be significantly increased. Vacant flats in Athens could be opened up in what one official described as a “mutually beneficial” arrangement for both refugees and Greeks.

Georgieva said plans were under way to expand and overhaul the bloc’s border protection agency, expedite repatriations and process more asylum claims in Greece and Italy, the two EU member states on the frontline of the influx.

Mouzalas said deportations, whether voluntary or enforced, of economic migrants would be speeded up. But he also admitted the process would require newcomers to be detained – anathema not that long ago for a leftwing government that had moved fast to dismantle detention centres.

“If they come from Pakistan, they will go back to Pakistan. If they come from Bangladesh, they will go back to Bangladesh,” he said. “It saddens me but the numbers are simply too big.”