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MADRID (Reuters) - La Canada Real is Spain's forgotten town.
Twenty minutes from the center of Madrid, 40,000 people live in a place where bare-footed children scamper between shacks and drug addicts shoot up on the pot-holed streets as rubbish trucks rumble past carrying the city's waste.
"It is totally shameful," said local Socialist party politician Maru Menendez, waving at rubbish blowing across the desolate landscape.
Now, 40 years after Moroccans, gypsies and peasants began to make this former sheep track their home, authorities have decided to clean up what is thought to be western Europe's biggest informal settlement.
Many residents are afraid at what they are planning.
"We don't know anything about what the government is going to do here. If they are going to throw us out or not," said Youssef Najah, a 32-year-old Moroccan-born motor mechanic who lives in the smarter Muslim part of town.
His fear stems from a deal struck earlier this month between local councils to remodel La Canada and sweep away its most squalid neighborhoods.
Better streets will be registered, the worst will be bulldozed to make way for a park. Under current laws only the poorest, and those who can prove they have lived there peacefully for five years, will be eligible for a council house.
The settlement of La Canada, pronounced 'Can-yada', is more of an alleyway than a town, measuring just 72 meters (79 yards) across -- the width allowed under a 700-year-old royal decree that established a criss-cross of livestock paths hundreds of kilometers (miles) long.
Homes built illegally along the 14 km (8.75 mile) urbanized stretch near Madrid range from cardboard shacks to luxurious, albeit home-made, villas with swimming pools.
Father Agustin Rodriguez, who was bagging up food parcels for poor families in his simple one-storey church, said it would take years for councils to examine which of La Canada's 2,000 homes should remain. In the meantime, residents would continue to suffer third-world conditions.
The neighborhood has no schools, nurseries or health clinics; some parts have no running water or drains, and the council does not collect rubbish or clean the streets. The local bus -- an essential motorway link to Madrid -- no longer stops there since it was used by drug addicts to get their fix.
"They should get us out of here, because here they don't allow you to live," said Salvador, who has lived in La Canada for decades, gesturing to a group of addicts outside his small brick house.
Nearby, empty syringes lie discarded on the stony climb to Father Agustin's church, where a bouncer outside keeps an eye on two skinny men huddled under a blanket in the blazing sun.
The church's cross is spray-painted on the wall after addicts stole the last wooden one and used it for firewood, he said.
"Things have got much worse in the last five or six years because of drugs," said the 51-year-old priest.
"Here you find many people trapped who have no way to get out and live somewhere else."
Nearly all the heroin, cocaine, pills and other illegal drugs taken in Madrid come from La Canada, said Father Agustin, who estimates 12,000 deals are done there every day.
Some areas are better kept.
Houda Akrikez' well constructed house is cool and has running water and electricity, and nearby there is a small mosque and cultural center. However, the community is angry about addicts who use their gardens to shoot up and is resentful at having been abandoned by the state.
"Spanish law supposedly says every neighborhood should have a health center, but there are none, nor schools, nor nurseries either," said the 21-year-old mother.
La Canada is an extreme case. However Victor Renes, head of research at Spanish charity Caritas, said its plight highlights the wider issue of poverty in Spain, and in particular a welfare system that is not protecting the very poorest.
Caritas estimates almost half a million Spanish families receive no income -- neither from work nor government benefits -- and up to 675,000 households live in severe poverty.
After 15 years of growth at an enviable 3.2 percent a year on average, Spain's economy has swung into sharp reverse, swelling to one in three those living on the bread line -- low paid, low skilled workers on temporary contracts -- according to the charity.
In the case of La Canada, Renes said he suspects authorities are promising to do more as the fast-expanding capital rushes to meet the settlement. What was once a speck in the distance is now just across the railway tracks.
"You find yourself here, where it is still possible to settle and try to survive ... at the margins where the city tolerates you ... until the city arrives and bumps into you and then after that you are tolerated no longer."
Editing by Ron Askew