The Minority Rights Group, The Helsinki Monitoring Group and Sokadre, a gypsy-support group based in Greece, have been joined in their criticism by a federation of Romany organisations backed by the Greek government.

The Panhellenic Federation of Greek Roma Associations said: “The state’s overall effort to integrate Greek gypsies socially has been undone by the actions of certain mayors.”

In the latest Greek census, held last year, residents did not have to state their ethnicity, so the Roma population is not known, but estimates put it at up to 300,000. Just under 9,000 gypsies are registered in Greek primary schools.

Using funds from the European Union, the Greek interior ministry recently allocated pound;19 million to be spent over six years on integrating Roma people. But the Panhellenic Federation said that some mayors have impeded the registration of gypsies in schools, often with the connivance of their principals. The federation gave three examples:

* The state provided about pound;34.5m to relocate Roma families living by the Gallikos River to an organised settlement in the municipality of Ehedoros-Thessaloniki, central Macedonia. Last year, however, the mayor would not admit the gypsy children into local schools but sent them to schools 20km away. This was “highly illegal”, the federation said, because the settlement’s gypsies, as official residents of Ehedoros, are required to register their children in the school’s municipality.

* The town of Spata, near Athens, obtained an interior ministry subsidy to relocate its gypsy residents. The new settlement was so far from schools that the children, who had been attending classes, had trouble getting there and dropped out. The municipality’s failure to help its gypsies led to Greece being censured by the Council of Europe for “institutionalised apartheid”.

* A school in Zefyri, also near Athens, had Roma and non-Roma pupils. When parents of the non-gypsies noticed an increase in the number of gypsy students, they used illegal methods, such as adopting false addresses, to transfer their children to other schools. The school became a gypsy-only school, with the blessing of the local authority. The Panhellenic Federation commented: “Monocultural education is a disgrace in a society that wants to call itself progressive.”

The federation said that functionally illiterate gypsy children are being promoted through the grades “solely to shorten their stay in school ... Gypsy children fill ‘special’ schools built of sheet metal and other makeshift materials, so that they don’t contaminate the ‘other’ children.”

The federation is urging the government to demand the return of funds from civic leaders who had tolerated the blocking of the educational integration of gypsy children. “Criminal penalties should be levied on those who violate the law,” it said.

The interior ministry was unable to comment.