Thousands of migrants are to have their papers legalised in Greece as part of efforts to curb an acute labour shortage that is hitting key sectors of an otherwise resurgent economy.

In a move that has thrown his centre-right party into turmoil, the Greek prime minister, Kyriakos Mitsotakis, pushed through legislation on Tuesday regularising the status of about 30,000 unregistered labourers.

Critics of the bill, which was passed in a parliamentary vote with the endorsement of the leftwing opposition, have described it as dangerous. Mitsotakis’s predecessor, Antonis Samaras, who voted against the law, had argued it risked turning Greece into “a beacon of attraction for illegal migrants”.

Defending the one-off measure, the country’s migration and asylum minister, Dimitris Kairidis, told the Guardian that the legislation would help with not only labour shortages but also social cohesion.

“This is a small step in meeting the acute needs of the tight labour market and a big step in enhancing public safety,” he said. “Greece is faced with an unprecedented problem of labour shortages … because of the high growth, the big fall in unemployment and the declining number of Albanian [workers].”

Like other parts of Europe, Greece has struggled to contend with an exodus of workers prompted by the Covid-19 pandemic. Labour scarcity is felt especially in agriculture, tourism and construction.

Agricultural associations, which depend on immigrants to gather fruit and vegetables, have increasingly complained of their produce rotting, and MPs in rural areas have exhorted Mitsotakis to take action. Fears for this year’s olive harvest have similarly grown, with farmers whose yields have fallen because of the climate crisis voicing alarm over the prospect of reduced pickings on account of the labour shortages.

Under the bill, migrants will be able to legalise their status more easily by acquiring residence permits in three years rather than seven if they can prove they are employed. Greek government officials have been quick to emphasise that by integrating “invisible people”, the measure will help boost public revenue with employment taxes and contributions. Many of the jobs that people from abroad are willing to do are ones that unemployed Greeks will not touch, unions say.

At a time when anti-immigrant sentiment is fuelling far-right support across Europe, the law has been welcomed, with the left seeing it as overdue, if also opportune.

“Simply because it has proven incapable of confronting the big problem of labour shortages, the government has been forced to adopt [our] proposal and has moved ahead with the rapid legalisation of work and residence permits for undocumented migrants,” said Theodora Tzakri, who heads the main opposition party Syriza’s parliamentary group.

On Europe’s south-eastern frontline, Greece has long been a gateway to the EU, and the centre-right administration has faced criticism for enforcing self-declared “tough but fair” migration policies that have sought to keep asylum seekers at bay through illegal “pushbacks” at land and sea borders, according to human rights groups.

With ruling party MPs told they would face discipline if they failed to back the bill on Tuesday, cabinet ministers were at pains to stress that the measure in no way presaged a relaxation of the government’s migration management agenda.

Insisting the measure would ease “legal pathways of migration” according to Greece’s economic needs, Kairidis said: “There is no loosening of our migration policy. Fighting illegal smuggling of migrants goes hand in hand with facilitating legal migration. For the latter to work we need to consolidate the sense of security in Greek society, and for the former to succeed we need to provide a legal alternative.”

He said the new policy had been drafted based on the experience and best practices of other EU member states. “We believe that our middle-of-the-road approach, based on common sense and the law, is the most appropriate for Europe today.”

Athens is also in the process of signing bilateral agreements “for labour mobility” with other third countries including Vietnam, Bangladesh, Georgia and Moldova. “This will provide the additional manpower our economy needs through a legal and well-regulated process,” Kairidis said, adding that state bureaucracy would undoubtedly have to improve to be able to issue permits to facilitate legal migration.