KOSOVO, the former Yugoslav province, is falling into the grip of Albanian organised crime gangs, casting a shadow over attempts by the international community to turn it into a fully fledged independent state by the end of this year.

Participants in talks in Vienna, sponsored by the United Nations, on the “final status” of Kosovo, are concerned that the mafia networks that smuggled guns into the disputed province from Albania in 1997 and 1998 are using the same channels for a burgeoning trade in illicit petrol, cigarettes and cement. Prostitution and drugs are also popular staples of the black economy.

The profits are ploughed into shopping centres and hotels, which are going up as part of a building boom in the province. Petrol stations are especially popular — there are more than 2,000 of them catering for a population of 2m in a territory the size of Devon. Many are believed to be part of a money laundering racket, controlled by a few of the largest clan families, involving oil smuggled in from Montenegro.

Despite attempts by Soren Jessen-Petersen, head of the UN mission in Kosovo, to downplay the extent of the problem, UN officials admit the corruption extends deep into the heart of the Kosovo government.

“Crime groups have been able to operate with impunity,” said Marek Antoni Nowicki, Poland’s leading human rights lawyer and the UN’s international ombudsman for Kosovo until last year.

“You have a criminal state in real power — it needs underground illegal structures to supply it with everything to survive. These networks can rely on the weakness of the public institutions to sanction their operations.”

On Friday the UN’s internal watchdog, the Office of Internal Oversight, accused Jessen-Petersen of turning a blind eye to widespread fraud at Pristina airport. He protested that the accusation was “entirely unwarranted”.

Kosovo is still technically part of Serbia: Vojislav Kostunica, the Serbian prime minister, argues that Belgrade must retain some form of control.

The fight against corruption is complicated by the fact that the task is shared between different bodies of varying degrees of competence.

“The aim is to keep the criminals under control,” said Nowicki. “The question is can the international community do it? It is very doubtful.”

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