Unpaid staff forced to spend half the night under London Bridge are triggering concerns about the government's "exploitative" work programme.
Former deputy prime minister John Prescott said he feared "the development of labour camps" after jobseekers acting as river pageant stewards endured a "freezing" few hours in central London.
Around 30 jobseekers and 50 others being paid apprentice wages were dropped off at London Bridge at 03:00 BST on Sunday, leaving them sheltering under the bridge for two hours.
"It's a breach of the responsibility of the company under the security agreements in the industry to have some proper regard to their employees," Lord Prescott told the Today programme.
"This is showing a complete disregard for the social conditions of cheap labour. Is this the Olympic model?"
Close Protection UK, the company providing security services for the Jubilee celebrations, did not provide any further accommodation for the jobseekers.
They were reportedly told they would not be paid because they were on trial for further paid roles in the Olympic Games.
"It was a logistics error - they arrived almost two hours early," managing director Molly Prince said.
Lord Prescott has written to home secretary Theresa May demanding that the use of private companies for these events should be investigated.
TUC general secretary Brendan Barber warned that the "appalling treatment" of those working for free over the weekend suggested government programmes may be being counterproductive.
"The main experience gained by staff appears to have been poor working conditions and exploitation," he said.
"Worse still, the government is encouraging more employers to treat staff poorly at work by stepping up its attacks on basic employment rights."
Shadow policing minister David Hanson said the reports of the way people were treated are "deeply concerning".
"When companies are offering work experience on public sector contracts and through government work programmes, people should be properly treated and should not be exploited," he said.
"The government has a responsibility to get to the bottom of what has happened here, and what the implications are for security contracts and the work programme."
"They have to ensure this disgraceful treatment cannot happen again."