Families from the 'Ndrangheta organization are infiltrating small towns in northern Italy, "influencing local government and monopolizing sectors key to the mafia economy," the country's organized crime watchdog said.
The mafia has traditionally flourished in poor southern Italy, but networks of mobsters from the Calabria region are increasingly taking advantage of a reduced police presence in small northern towns and the fact that fewer votes are needed to get elected to town councils.
"The latest police probes have revealed a political and institutional system which is increasingly vulnerable to mafia infiltration, as well as business communities which often collude, and abide by the code of silence," the Observatory said in a report titled "Mafia in the North".
The 'Ndrangheta organization plays a leading role in the global cocaine trade and its Calabria bastion is a major transit point for drug shipments from Latin America to the rest of Europe.
The revelation came just days after Prime Minister Matteo Renzi vowed to make inroads into widespread corruption in northern Italy by boosting the powers wielded by top magistrate Raffaele Cantone, famed for investigations into organized crime groups.
A series of corruption scandals has also thrown the spotlight onto detention conditions in Italy's prisons and the reach of mobster bosses from behind bars - an issue addressed on Thursday by a Senate meeting on the rights of mafia inmates.
Bosses captured in Italy are imprisoned in particularly severe conditions under a law known as "41 bis", which greatly restricts their contact with other inmates and non-prisoners in an attempt to stop them continuing to orchestrate crime from the inside.
Mafia on the inside
The law was adopted in 1975 as an emergency measure to deal with prison unrest during the so-called "years of lead" in which the mafia, the ultra-leftwing Red Brigades and neo-fascist groups were implicated in a surge of political violence.
"The law aims to prevent prison from becoming an extension of territory, with the organization controlling it as it controlled its territory" on the outside, anti-mafia prosecutor Franco Roberti told the Senate.
He gave as an example the failure to limit the rights of Raffaele Cutolo, nicknamed "the professor", which allowed him to found a new mafia group from behind bars in the 1970s while serving multiple life sentences for murder.
But Mauro Palma, chair of the European Council on prisons, warned the Senate that the harsh treatment of gangsters could see Italy condemned by the European Court of Human Rights.
A report by the European Committee for the Prevention of Torture (CPT) in 2012 had outlined a series of concerns - such as limited time allowed out of solitary confinement and reduced contact with relatives on the outside - which Palma said had remained unchanged.
"We need to make sure the inmates spend at least four hours out of their cells and not two," he said, as well as allowing them to accumulate visiting hours -- currently limited to one hour a month.
Inmates - including top Sicilian bosses "Toto" Rina and Bernardo Provenzano - can only speak to visitors via intercom from behind a thick glass wall - or swap their monthly visit for one ten-minute telephone call.
According to Roberti, there are currently 717 inmates being held under "41 bis", three of them for "terrorism" - including the only woman, a member of the Red Brigades - and the rest for mafia crimes.
The current system must be revised "to prevent the Court of Human Rights receiving complaints about unjustified detention conditions," Palma said.