The European Commission on Wednesday warned Italy to clear up its trash crisis or face punitive action.
Rubbish has been heaped in the streets in and around Naples for days and many piles were set alight on New Year's Eve.
The pyres were still smoking on Wednesday, sending toxic fumes across the city.
Officials said there were ''dangerous'' levels of dioxin in the air.
Elsewhere, police had to move in to break up a renewed protest against a new rubbish incinerator near the southern Italian city.
All six waste-disposal plants in the Campania region had to close down because of demonstrators stopping the packed rubbish leaving their gates.
''The EC is following the situation very closely and will weigh whether to take action in the coming days,'' said Environment Spokesman Stavros Dimas.
