Rancadore was arrested on Wednesday evening at a residential address in Uxbridge, west London, by officers from the extradition squad under a European arrest warrant issued in January 2012.

Police would not comment on why it has taken so long to carry out the warrant. It is understood he was living under an alias in Uxbridge using the family name Skinner.

He is in police custody and was due to appear at Westminster magistrates court in central London later yesterday.

Joan Hills, a neighbour, said she had known the family as the Skinners. "I know him very well," she said. "He is one of the best neighbours you could ever have. They have been here for years." She said "Mr Skinner" and his wife Anne had two children who had grown up in the area. She said his wife ran a local business.

The Italian interior ministry said Rancadore was a "prominent representative" of the Cosa Nostra who had "led a comfortable life" running a travel agency in London. Rancadore had been on the run since 1994, it added. "Numerous collaborators … have described him as a prominent representative of the Palermo mafia family," the statement said. During the 1990s, it added, Rancadore had been the head of the Cosa Nostra in the Sicilian town of Trabia.

Reportedly a former physical education teacher in Sicily who continued to take his pension while in London, Rancadore - nicknamed "the professor"- was considered one of the most dangerous Italian fugitives.

In early 2012 the Italian daily reported that his whereabouts in Britain had been recently discovered by police, but that a subsequent extradition request had been denied by the British authorities.

But yesterday the Italian interior ministry said the arrest had come after British police acted on information from the Italian authorities and police in the southern city of Potenza.