Baby M may never know the terrible truth of his birth, but the arrest of his Ukrainian mother and her cohorts in southern Italy has exposed a thriving secret trade in babies for adoption by Western couples and body parts for illegal transplants.

Baby M, born two weeks ago near the southern Italian port city of Bari, was sold for 350,000 ($624,000) by a Ukrainian-organised gang operating across Europe with close links to Italian organised crime.

But the buyers were undercover Italian carabinieri who infiltrated the gang, intercepted their conversations for months and, just after the baby's birth, scored a body blow against a trade which investigators believe may involve the sale of up 3000 babies a year.

Authorities and long-time campaigners against the growing traffic in babies, young children and women, mainly from Moldavia, Romania, the Ukraine and Albania, have heralded the operation as a vital strike against organised crime.

"This is the first time the carabinieri were able to nail the criminals and be able to have actual evidence of their discussions," an Italian MP, Tana de Zulueta, said. "We suspect this has happened many times before and gone undetected."

Four members of the gang, led by 36-year-old Ukrainian-born Nadia Tkachenko, and including the baby's 28-year-old mother, Oksana Fedanova, are awaiting trial on charges which include attempted enslavement, falsifying birth documents and currency and firearm offences.

They came to the attention of Italian organised crime investigators from the province of Foggia, north of Bari, early last year for drug-running activities tied to the Italian Mafia. . More than 20 murders have been linked to organised crime in the province in the past 11 months.

But late last year, the gang - three women and a man - asked undercover agents if they were interested in buying humans. By December, Tkachenko let it be known the gang had a "package" for delivery in May. The head of investigation, Colonel Claudio Pelella, said the agents were surprised "because they were working on the drugs and then this came up. We were very shocked - horrified, because children represent innocence. That was the scandal of it." The agents agreed to pay the first asking price for the baby - 50,000 euros - and, with permission from a prosecuting magistrate, Gianrico Carofiglio, set a trap to catch the Ukrainians red-handed and save the baby.

Fedanova, her in-house midwife, Olena Kaurova, 62, Tkachenko, and her bodyguard, Mykhaylo Mamot, 29, unsuspectingly kept the agents up to date on baby M's early progress. They even agreed to visit a gynaecologist, who was in on the sting, at a local hospital.

Now they each face up to six years in jail. The victims of 21st century slavery haunt the night streets across Europe, especially the back streets of Italy. Young women and girls in eastern Europe, barely 70 kilometres away by sea, a short speedboat trip across the Adriatic, or by road via Italy's northern borders, buy the promise of jobs and money in the West from organised gangs, enter illegally and end up sold into prostitution under threat of death.

Their children - the "mistakes" of their new profession - are prey to the gangs who, according to a campaigning priest, Father Cesare Lo Deserto, trade babies for body parts - mainly livers and corneas - to privately run clinics in Israel and Turkey, or offer them for adoption to Western couples with the money and contacts to bypass official waiting lists.

Actual figures are hard to come by, but he has received reports of livers and kidneys selling for between $US4000 ($6000) to $US6000.

A stout, tireless man, Father Cesare operates a refuge for trafficked women in San Foca, near Lecce, deep into Italy's heel. His refuge, Regina Pacis (Queen of Peace), is home to 70 women and their children. It is a heavily guarded fortress, floodlit by night and patrolled by armed carabinieri. He is under 24-hour protection against the gangs. For him, the Baby M case is proof of what women have been telling him about the trade in babies and minors for a long time. "I've been seeing this for years, but it's hard to get the evidence to stand up in court," he said. "In the Ukraine, they've said to me 'we've got five children and we have to sacrifice one for the other four'."

More recently, Father Cesare said the trend by traffickers had been to bring in childless women to Italy and then make them pregnant once they were in the West. He has taken his campaign into Moldavia with highway poster advertisements, calling on women to "say no" to traffickers. Women who arrive pregnant, such as Marta, 19, know they will not be allowed to keep their babies.

An Albanian, she arrived in southern Italy three months pregnant two years ago. Fortunately, her boat was met by police and, after a spell in custody, she was taken to Father Cesare. She and her toddler, Ana, have been there since. "I was in such fear," she said through an interpreter. "If they take my child, they take my life."

Fedanova, baby M's mother, appeared to have no such fear. Secretly taped conversations between her and police indicate she had little remorse about selling her unborn child to the agents, one of whom was posing as a lawyer acting on behalf of a childless couple.

At one point, an agent asks her: "You are sure want to sell your son." She replies, "Yes. I've decided." Then the Ukrainians decided their package would be worth more if two parties were bidding. They told the agents they had received an offer from another group. In the ensuing bidding war, Baby M's value rose to 350,000 euros - seven times the original price.

Colonel Pelella said the agents agreed to the higher price to guarantee they bought the baby and to give them control over his fate. "By January, they were very anxious about the life of the mother and to ensure the baby was born in the best way possible." As the birth neared, the agents convinced Fedanova and Kaurova to move into an apartment in Giovinazzo, a nondescript, former steel town about 20 kilometres north of Bari. It was here, after the mother and midwife had attended a celebration in Bari for Saint Nicholas, the Orthodox saint whose tomb rests in a local church, that baby M was born at home on May 9. Kaurova cut the cord with a kitchen knife.

The baby weighed 3.8 kilos and, in the flush of delivery, was named after one of the agents, whose first name begins with M. A few hours later, after Tkachenko had joined the birth group and demanded her money, the carabinieri raided the flat and arrested the three women. Bodyguard Mamot was arrested near Naples at the same time.

Authorities are reluctant to confirm that baby M could have ended up in the body parts trade. They did not want to raise the issue during the investigation because it would risk spooking the gang and putting the baby's life at risk. But they suspect the Ukrainians, especially Tkachenko, may have been involved in trading the organs of other children.

The case has had immediate impact on lawmakers.

Legislation proposed two years ago by de Zulueta, an opposition senator, aimed at stopping trafficking and the sale of human organs has been slowly moving through the Italian Parliament. In the the aftermath of the case, it has gained bipartisan support and is likely to be passed as a matter of urgency.

The new law will increase penalties for trafficking in humans and body parts to up to 30 years in jail and give investigators new powers to use phone taps, intercepts and other techniques. In the baby M case, police were allowed to use intercepts only because it began as a drug case.

The Ukrainian gang members face between five and six years in jail. But magistrate Carofiglio, who, under the Italian system, prosecutes the investigation and the legal case, appears to be softening towards Fedanova, the mother. She did not produce the baby on demand, he said, and had first wanted to have an abortion, only to be persuaded to keep the child by Tkachenko.

Baby M is unlikely ever to meet his mother or her conspirators. He has already been adopted out to a Italian family. But one day he may read the inside account of the investigation. Magistrate Carofiglio, a novelist with a growing reputation in the crime genre, is thinking about putting it all into a book.