Life in Italy's second city threatened to grind to a standstill this week as the biggest ever Naples rubbish crisis came to an evil-smelling crescendo.

Huge piles of uncollected rubbish have accumulated across the city, more than 2,700 tons of it according to the city authorities. Hundreds of fires have been started in the rubbish by infuriated residents, only aggravating the problem.

Protests rage in five locations selected for emergency landfills; in one of them, the town of Serre outside the city, Italy's environment minister, Alfonso Pecoraro Scanio, has come out on the side of the protesters as the planned dump is only a few kilometres from a protected beauty spot.

The rubbish remains uncollected because the city has run out of places to dispose of it, and by the end of this week the one remaining dump in active use, at Villaricca, will close because it is full to the brim. Then the city does not know what it will do.

Last week the man appointed by the government to solve the problem, Guido Bertolaso, the chief of the civil protection service, resigned when the government undermined his authority by agreeing to change the location of one of the emergency landfill sites he is struggling to create. But on Monday, Prime Minister Romano Prodi persuaded him to stay on, to much relief.

But with the construction of the new sites blocked by local demonstrations, no end to the crisis is in sight. Today, 10,000 students in the north Naples town of Frattamaggiore will stay at home after the mayor, Francesco Russo, ordered the schools to close to protect the health of students and teachers. "There are too many risks for the citizens' health," he said yesterday. "In a few days, with the closure of the Villaricca dump, we risk being in a dramatic situation for which everybody must assume responsibility. But it is clear that if the blockades of the [proposed new] dumps are not lifted, we mayors can do very little."

The timing of the emergency could not be worse, with the tourist season about to begin and the weather turning hot. Rubbish has accumulated not only in the teeming medieval city but around the ancient Roman remains of Herculaneum, on the popular Sorrento coast south of the city and on the lower slopes of Mt Vesuvius.

Political weakness in the teeth of widespread opposition to new dumps and incinerators has been exacerbated by the involvement of the Camorra, the region's criminal gangs, in the illegal trade in waste which is said to be their second biggest source of revenue after illegal drugs. Naples-based gangs dump millions of tons of waste, much of it toxic, in illegal landfills blasted in mountainsides in the region. They are said to be actively involved in preventing new sites and incinerators, which would eat into their profits, from being created.