Italian police have impounded an entire neighbourhood built illegally on the outskirts of Naples, part of an operation magistrates hope will uproot the mafia wealth hidden behind the day-to-day mob shootings that plague the city.

In three raids this month, police sealed off with crime scene tape 50 new buildings containing more than 300 flats as well as 22 small villas that have appeared on broccoli fields in Casalnuovo, on the rural fringes of Naples' sprawling suburbs.

"About €50-60m (£33-40m) was invested here," said investigating magistrate Francesco Greco. "The money involved, the size of the site and the lack of permits leads us to believe a criminal organisation may be behind it, probably with political support."

Local mayor Antonio Manna, elected as a candidate for Silvio Berlusconi's Forza Italia party, told the newspaper Corriere della Sera he was unaware of the mammoth development and that he would order an inquiry immediately.

Local politicians may have used legislation allowing amnesties on illegal building to let the Naples mafia start the construction, claimed Tommaso Sodano, head of the Italian senate's environmental commission. But investigators used old satellite photographs of the area, which is officially classified as agricultural, to prove the unlicensed buildings were erected after 2003, the last time the Italian government offered such an amnesty.

Today the work is near completion, most streets are paved and lit and the apartments are hooked up to the national electricity network. Five families who have purchased apartments and moved in would have to leave, said Mr Greco.

Mr Sodano said that if local politicians did not organise the demolition of the neighbourhood, Rome should send in the bulldozers. The governor of the Campania region, Antonio Bassolino, has promised to increase satellite photo monitoring of unlicensed building - believed to amount to 16 new houses a day in the region.

There have been five mob-related killings in Campania in three days this month, which have been linked to a turf war between the clans that make up the city's Camorra mafia, despite a crackdown ordered by the government and an anti-violence campaign launched by the city's churches.