Three small kittens and a hungry-looking mongrel are the last remaining inhabitants of the Roma squatter camp on the northern outskirts of Rome. The camp is yards from Tor di Quinto station on a commuter line from central Rome, but, screened by trees and creepers and huddled in a narrow gully, it is invisible until you part the creeper and step inside. Then you find the first of a line of flimsy huts, put together from scrap wood and fabric and cardboard but neat and cared-for. Inside some of them have rugs on the floor, tiny gas cooking stoves, dressers with ornaments, a double bed, a broken down chair; outside is a mouldy old sofa, a moth-eaten beach umbrella shading an old coffee table: la dolce vita for Italy's poorest and most marginal residents.

The camp is empty because on Wednesday a naval captain's wife, Giovanna Reggiani, 47, returning home from a shopping trip to central Rome, was attacked and robbed near here, and dumped in the gully. Last night she died in hospital. It was a vicious crime, and fed into a mounting national mood of anger and exasperation about immigration. Suddenly Italy's political system, normally so sluggish, sprang into life.

Within hours Italy was doing what millions of people around Europe – whipped up by populist politicians and a xenophobic media – would like to see their own governments doing: taking quick, dramatic and draconian action to teach the immigrants a lesson they won't forget.

A new law on security has been creeping through parliament: one of its central provisions is that foreigners belonging to EU countries and resident in Italy can be expelled on the orders of local prefects if they are a threat to "public security". No trial is necessary. On Wednesday night, at the urging of Walter Veltroni, the Mayor of Rome and leader of a new centrist party, the Democratic Party, that provision was extracted from the law, quickly redrafted as a "decree-law", a sort of diktat, and signed by the President overnight. From being the sluggard of the EU, suddenly Italy was in the vanguard. "First 5,000 expulsions to go ahead," promised La Repubblica newspaper.

The decree law came into force yesterday, and last night the Prefect of Milan became the first in the country to apply for its implementation, demanding the expulsion of four Roma. The Roma are as ever the first minority group to be singled out and vilified when anti-immigrant sentiments are inflamed.

While the politicians and lawyers were thrusting the law through the system, the state was coming down hard on the squatters of Tor di Quinto. A line of police cars arrived at the site and police chased the Roma away from their makeshift homes. Forensic detectives went through the camp for clues to the murder, and it was expected that its shacks would be levelled by bulldozers within a few hours. Other police teams descended on camps small and large dotted across the shabby, sprawling, crime-infested and chaotic Roman outskirts, and along the squalid banks of the Tiber.

It's the sort of bold, drastic action against the tide of immigration that many have called for across much of western Europe.

The free movement of people across the continent is a cornerstone of the union of 27 member states but the linkage between immigration and crime remains explosive. In Italy, as in Britain, the Netherlands and elsewhere, the issue of foreign criminals stirs a mob mentality that can quickly remove senior politicians from office if they are caught on the wrong side of it.

Statistics do little to calm the debate. Analysis from the Metropolitan Police suggests that foreign migrants are if anything less likely to commit crimes than other groups. Figures suggested that they made up 27 per cent of the population in London but committed 20 per cent of the crimes. Danny Sriskandarajah, a respected expert on migration at the Institute of Public Policy Research, said: "Although the evidence may suggest foreigners are no more, and maybe less likely to be criminal in the UK there is a combination of fears about outsiders and mistrust of outsiders.

Yesterday the consensus on the streets of Rome was that the crackdown was long overdue. A woman on crutches at Ponte Milvio, a couple of miles from the crime scene, said baldly: "It would be better if they all went home. Here we are all scared." A middle-aged woman shopping with her husband said: "I've no objection to them being here as such. But if they don't have regular work and a steady income, if they have to rob and murder to stay alive, it would be better if they went home."

But another woman said Mr Veltroni couldn't escape blame. "He's been a good mayor in many ways but it's true that he has had no interest in dealing with this problem."

If the murder of Mrs Reggiani has plunged Italy into a moral panic, it has been a long time coming. Politicians, Mr Veltroni and the post-Fascist leader Gianfranco Fini leading the pack, have been doing everything they can to prove that they are tough on immigrant crime. Mr Fini took journalists up in a plane the other week to point out Rome's squatter camps, while Mr Veltroni flew to Bucharest to plead with the Romanian President to put a brake on emigration.

Increasingly racist coverage of muggings, rapes and murders in the press and on television has built a mood of national hysteria. In Italy there is a widespread feeling that the country is swamped by outsiders. About 700,000 immigrants have arrived – more than in any other EU country. Yet it rests on a flimsy basis of fact. In the 10 months since Romania entered the EU, Romanians have been accused of nine separate cases of murder against Italians, a number dwarfed by, for example, gang murders in Naples.

Amid the cathartic sense yesterday that at last the people's voice was being heard, murmurs of doubt arose. If only the lane leading to the station had had the benefit of a few street lamps – would the murder have happened? If Mr Veltroni had taken action against the squatter camps years ago instead of negligently allowing them to multiply – would the country be faced with this sense of crisis?

The attack on Giovanna Reggiani came to light after a Roma woman stood in the middle of the road and forced a bus to stop. Unable to speak Italian, she screamed the name of the man now accused of the murder – "Mailat!" – and mimed a man carrying a body. She led the police to the body, and to the shack where Nicolae Romolus Mailat lived with his mother. After receiving threats from people in the camp she is now under police protection.

Mr Mailat was remanded in custody charged with attempted murder, sexual violence and robbery. He has admitted only the robbery.