Lord Prescott has accused the government of exploiting cheap labour after unpaid workers bussed into London for the Diamond Jubilee celebrations were left stranded in the middle of the night.
The former deputy prime minister said there had been a "complete disregard" for the conditions of the stewards who were forced to sleep in the cold under London Bridge in the early hours of Sunday morning.
The Labour peer, who has urged ministers to investigate, warned that the incident could set the tone for the treatment of workers during the Olympics.
Speaking to BBC Radio 4's Today programme, he said: "It raises many questions on the provision of unpaid labour in these kind of positions, not only on the Jubilee event, but also particularly for the coming Olympic ones."
He said Home Secretary Theresa May should look at the conditions of employment by companies like Close Protection UK, who provided stewards during the weekend celebrations and are bidding for contracts during the Olympics.
On Tuesday Labour backbencher Kerry McCarthy told The Huffington Post UK that she wanted to "get to the bottom" of the story.
Pointing to the fact that companies have had a "long, long time" to prepare for these big events, she posed the question:
"Why did they not use people from London rather than bus in slave labour from outside? Is it an ideal thing to have people thrown in a the deep end for these big events?"
The unpaid labour were brought in as part of the Government's Work Programme, under which unemployed jobseekers must take up placements in order to continue receiving benefits.
"We're using unpaid labour in the kinds of positions that are causing great concern and may well be establishing the practice for the coming Olympics, which this company is involved in as well," Lord Prescott said.
"Not only was it under the bridge, but they were then sent to a camp which they described as 'swampy and wet' after this event, almost becoming a development of labour camps. Is this going to be the circumstances for the Olympic site?
"This is showing a complete disregard for the social conditions of cheap labour."
He questioned what conditions workers would be expected to put up with during the Olympics, adding: "What conditions will they be paying for, how will they be sleeping? Who is responsible? This government that exploits cheap labour."
According to reports, the jobseekers had to change into security gear in public and could not access a toilet for 24 hours.
After a 14-hour shift in the rain on Sunday - marshalling crowds who had turned up to watch the river pageant - they were then taken to a swamp-like campsite outside London, it is claimed.
Molly Prince, managing director of Close Protection UK, said the situation had been "exaggerated".
"We're talking about two or three people complaining out of 220 staff that were supplied to the event," she told Today.
"It was badly handled and for that we've extensively apologised. We're not in the business of exploiting free labour."
She said the stewards had been left under London Bridge after the bus arrived there two hours earlier than scheduled.
"There was an employee on the bus. That's an issue for myself to deal with internally and I don't agree with his decision to allow the deployment of these people into the bridge area," she added.
"They should have been left on the coach until the director arrived on site with the other staff members."
Ms Prince also insisted there was "dry sheltered accommodation" provided at the campsite and that the "logistical mistakes" from the weekend would be "learnt from in readiness for the Olympics".
Take a look at Tuesday's diamond jubilee pictures below
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