Feng Duanzhan was just two years old when he was labelled an enemy of the Chinese Communist Party. Feng’s only “crime” was that he was born in the wrong place at the wrong time, or rather that he was born to the wrong father, an official with the Nationalist government overthrown by the Communists in 1949. “Even now, I don’t know what he did,” Feng said of his father.

In the 1950s, the party set up huge camps to house political prisoners condemned as “counter-revolutionaries” or “rightists” alongside convicted criminals. It modelled this laogai (reform through labour) system on the Soviet gulags.

In 1958, at 11 years old, Feng was sent with his father to the giant Shayang agricultural camp in the central province of Hubei, where he “laboured like a criminal”.

“At that time, the Communist Party said we were from the ‘exploiting class’,” Feng said. “They gave all our food to other families.”

Worse was to come for Feng in 1965 when he joined a team making emergency repairs to a dyke during the biggest flood for a century in the Han river, a major tributary of the Yangtze. The surging floodwater forced silt into his eyes while Feng, then aged 18, was working underwater.

“Because medical conditions were not so good at that time, I didn’t even rinse my eyes with clean water,” he said.

“Today I am virtually blind in both eyes.”

Feng also developed epilepsy after the accident and his poor eyesight meant he was given no opportunity to study, so he became a farm labourer at the Shayang complex.

Even as China was starting to wind down the detention of political prisoners at laogai camps, Feng was still bullied because of his family background.

In 1981, when he organised a petition against a camp leader who had taken cooking oil and food from the “counter-revolutionary” prisoners, he was forced to walk around the farm with a “troublemaker” sign around his neck, he said.

Fed up with his latest humiliation, Feng fled from the camp at the end of 1981, spending the next 20 years living rough in Hubei.

In the last decade, he has tried in vain to win compensation for his labour and disability and has received threats from local officials. He survives on a standard government disability benefit of around £20 a month.

In fact, laogai officials had already released many political prisoners by 1981, following the death of Mao Zedong in late 1976 and the ending of the Cultural Revolution.

Harry Wu, founder of the US-based Laogai Research Foundation, spent 19 years in the laogai system. Wu was sent to a labour camp as a young man in 1960 after police arrested him at his university classroom.

“I just said I disagreed with the Soviet invasion of Hungary,” said Wu, a long-term campaigner for human rights in China, who has written several books on his experiences of the laogai.

Forced to work at laogai farms and a coal mine in the 1960s and 1970s, Wu’s punishments included once having his arm broken by a shovel after guards found books he had buried in a field.

After his release in 1979, Wu left China to join a sister in the US. But in the early 1990s, by then a US citizen, he risked further imprisonment by returning to China to document the laogai and bring them to international attention.

Wu found evidence that several Chinese products of forced labour goods were exported to the West. He has collected scores of testimonies from others imprisoned in the laogai, which he takes to refer to China’s entire penal system, including prisons, detention centres and the laogai (re-education through labour) camps that were also opened in the 1950s.

The prisons and labour camps taken together still form an “instrument of the government to handle the people”, he said.

“We put laogai in the dictionary just like the Soviet gulag.”

China still uses laogai camps, but most laogai facilities were rebranded as prisons after the government officially ended the use of the name in 1994. The Laogai foundation estimates that 40million to 50m people have been imprisoned in the laogai system since the 1950s.

Over the last 30 years, the government has modernised many prisons, improved living conditions, relaxed regulations and dropped much of the old “thought reform” of prisoners, Wu said. “But the function of the prison system – it means force the prisoners to labour and force them to change their mind – is not going to change,” he said. “And the most important thing that hasn’t changed is laogai.”

The laogai system continues despite growing opposition. Most of those held at today’s camps are believed to be people convicted of crimes deemed relatively minor, such as drug use, prostitution, burglary and assault. In one case reported by state television last month, for example, a restaurant manager in the southern city of Shenzhen was sentenced to one year of laogai for distributing forged banknotes.

Government reports emphasise the role of the camps in rehabilitating drug users, but there are many recent reports of laogai sentences for petitioners, rights activists, organisers of unregistered or illegal religious groups, and those who confront powerful local officials over issues such as corruption or illegal land use. The same groups are often held for short periods at illegal “black jails” used as makeshift police detention centres and sometimes even confined in psychiatric units without any proper assessment.

Police in the north-eastern province of Jilin have sent Wang Xiuhua to both a psychiatric unit and a labour camp. “They kept me for one year in the women’s laogai centre and sent me to the psychiatric hospital twice,” Wang said.

Wang, 42, tried to complain about the failure of firefighters to answer an emergency call when fire spread through her tree nursery in 2007. After the police ignored her for months, Wang petitioned higher authorities and eventually took her case to Beijing, where police seized her and took her back to Jilin. She is now also attempting to get the authorities to admit that she was illegally imprisoned and has no mental illness.

Wang’s friend, Zhang Jie, was also detained in Beijing while she was petitioning over a dispute that began in 2003 with her family’s fight for compensation for their demolished homes. Both women insist they have never broken any law.

“I have never committed a crime but I am treated worse than a criminal,” Zhang said. “The government says it wants to protect human rights but we get no protection at all. The Public Security Bureau does whatever it wants.”

Over the past three years, Zhang has spent three periods of up to 70 days at the women’s laogai centre and a nearby prison hospital, which is still known locally as the Laogai Hospital, in the Jilin provincial capital of Changchun.

Zhang, 54, showed a jagged semicircular scar on her right wrist, which she said was caused during her detention last year when she tried to kill herself by biting into her arteries. She alleged that before her last period at the women’s laogai centre earlier this year, police had beaten her neck and back, injuring her badly enough to make it hard for her to stand up. Laogai managers at first refused to accept her but later told her the police had given them money them to take her.

Zhang said she knew at least 10 other petitioners who were sentenced to laogai camps, five of whom are still there. Among them is her elder sister, Zhang Xiuyun, who was freed in May after one year in the Jilin women’s camp.

While she was petitioning in Beijing again in September, Jilin police seized the elder Zhang, 59, and notified her family that she was in criminal detention for “disturbing social order”.

In a rare confirmation for such cases in China, Li Chiwei, a local police supervision official, said by telephone on Wednesday that Zhang Xiuyun was again “sent to laogai in accordance with the law”. Li refused to discuss any other details of the case.

Zhang Xiuyun is among tens of thousands of people currently detained at the laogai camps. Wu estimates that up to 500,000 people could still be held in laogai centres. According to rights groups using information published by China’s justice ministry, which ­nominally oversees the system, the number could have dropped to 190,000.

Hu Xingdou, a Beijing-based economist who has led calls to abolish laogai, said there were more than 300 centres each holding an average of 1,000 to 2,000 prisoners. Such numbers are much smaller than the estimated populations of many laogai camps in the 1960s. Baimaoling, a huge laogai site near Shanghai, held about 50,000 people at its height in the 1960s.

The number of political prisoners held in the laogai system was difficult to estimate because some of them were locked up on false charges, the Laogai Foundation said. That practice continues according to reports by rights groups, with many people who could be deemed prisoners of conscience detained at prisons or laogai centres.

Most prisoners are still forced to labour in farms, factories and even coal mines. State media and government websites offer small clues, but most information comes from the testimonies of former prisoners.

The Changde laogai centre in the southern province of Hunan said it was opened in 1983 and developed from a “basic agricultural chemical plant” into a “garden-style, military barrack-style, college-style” enterprise with annual production valued at 30m yuan (£2.7m). “Since building the centre, more than 20,000 fallen people have returned to society from here to start new lives,” the centre said on its official website.

Zhang Jie said women at the Jilin centre assembled small artificial butterflies and other craft products from 6am to 8pm daily, earning just 6 yuan (50p) a month.

Wu said many products of laogai are still exported from China, citing Christmas lights, shoes, car parts and hand tools.

Such products can only be ordered indirectly through trading companies, obscuring their origin. Grapes used for one of China’s leading wine brands are grown at the Tuanhe Farm laogai centre near Beijing, where Wu was once a ­prisoner, he said.

Prison labour is not forbidden by international rights covenants. But forced labour under the laogai system, which lacks any trial or proper appeal, even contravenes China’s own constitution, according to Hu and others lobbying for the end of the system.

Laogai is “basically illegal”, Hu said. “They don’t need any evidence, they don’t need any trial... (and) there is no right of appeal,” he said. “The government keeps saying it wants a nation ruled by law, but the movement is backwards.”

Hu was referring to a debate on laogai dating back at least a decade.

In 2005, the Justice Ministry said it planned to make a “big change” to the system, reducing the number of custodial sentences, allowing some right of appeal against the “administrative” sentences that are passed largely by police officers, and moving towards relatively open offenders’ centres.

Hu is not optimistic that laogai will be abolished soon, estimating that the process will take “at least five to 10 years”.

In one of the most recent defences, responding to German criticism, foreign ministry spokeswoman Jiang Yu in 2007 said laogai had an “important role to prevent and reduce crime, and to safeguard social stability”.

Wu is disappointed that most Western governments have put little pressure on China to close the labour camps. “You have heard many people condemn the gulags, but not many condemn the laogai,” he said.