Private individuals are using a 118-year-old mining law to acquire public lands for growing marijuana, building vacation cabins, storing toxic chemicals and other purposes, according to a congressional inquiry.

The law allows U.S. citizens to mine certain minerals from federal lands free of charge, but the General Accounting Office (GAO) found that many mineral claims are fronts for "unauthorized activities."

The most common abuse involves the construction of houses and cabins, many with "amenities such as gazebos, garages, greenhouses and satellite television dishes," the report said. "All these claim holders live rent-free on public land."

The findings are more ammunition for critics of the mining law, whose essential principles have remained intact since it was signed by President Ulysses S. Grant in 1872. The law, which governs "hardrock" minerals such as gold, silver, copper and other substances, allows miners to claim valuable deposits on federal lands without paying royalties to the government.

In addition, claim holders can acquire full ownership of the land for $2.50 or $5 an acre, depending on the type of claim.

"This investigation reveals a pattern of public land speculation and exploitation that is simply beyond the ability of the federal government to control under existing law," said Rep. Nick Joe Rahall II (D-W.Va.), who is sponsoring a bill to strengthen the government's regulatory hand. "The mining law is viewed by some as an open invitation to engage in illicit and unauthorized activities that have nothing to do with mineral exploration and development."

Keith Knoblock, a vice president of the American Mining Congress, said the types of violations uncovered in the investigation are prohibited and do not reveal flaws in the mining law. "It's a matter of enforcement," he said.

In addition to unauthorized activities on public lands, investigators said the law has been used by entrepreneurs who file "nuisance" claims aimed at turning a quick speculative profit.

One individual, for example, recently claimed 540 acres of Nevada desert that happened to be part of the site of a proposed nuclear waste repository to be operated by the Energy Department at Yucca Mountain. Although the repository plans were well known at the time the claims were filed, last year the department was forced to buy out the claim holder for $249,500.

GAO also found that the law has figured prominently in phony gold-mining schemes that have bilked investors out of $250 million in recent years.

"Many scams follow a similar format," the report found. "The operator is able to show investors that claims have already been staked on federal land -- ostensibly for the purpose of mining a valuable mineral. The problem is that either the ore is never mined or the material mined is not valuable."

Even in instances where claim holders do not acquire outright title to public lands, some have interpreted the law as granting them virtual private property rights over mineral claims, protecting them with fences, verbal threats and brandished firearms, the report said.

GAO investigators found that "in some scenic locations, claim holders live in unauthorized residences on mining claims where there is no pretense of mining." For example, about 200 claim holders live in California's Klamath National Forest; 40 are served by a rural mail route, and several claims in the Klamath were being used to grow marijuana, the report said.

In addition, the report cited instances of mining claims used for "non-mining commercial operations ranging from rental properties to toxic chemical storage." One claim holder was using his "mine" to recover silver, not from the ground, but from photographic processing materials.