SANTA CATARINA PINULA, Guatemala - The warning signs were everywhere in the canyon neighbourhood of Cambray on the outskirts of Guatemala City, where a mudslide buried hundreds of people last week.

Residents lived with regular falling rocks and flooding from the adjacent Pinula River. Evelyn de Cifuentes said her mother-in-law was killed in a smaller slide in 2010 next to her own house. A November report by Guatemala's National Disaster Reduction Commission said there were "fractures in blocks of material that can indicate future slides," and people should be moved out.

But the area wasn't declared uninhabitable until Monday, four days after hundreds of people almost certainly perished when a hillside buried acres of the neighbourhood. The official death count stood at 186 Tuesday, with 300 people still believed to be missing.

The Guatemala prosecutor's office announced it will conduct an investigation into who was responsible for allowing the dangerous conditions to exist.

"We will establish the degree of responsibility as best we can - who authorized construction in that area, and whether someone didn't take appropriate action to avoid this tragedy," said prosecutor Rotman Perez of the political crimes section.

Perez said all aspects are under investigation, including who was given the report from the disaster commission, whether anything was done, who had jurisdiction over the area and who was collecting the taxes.

About 250 people remained in two municipal shelters barred from returning to their homes. They said they hadn't received any information on relocation, but had been told that it's coming.

"There were slides, but just pieces," said Marco Antonio Pu, 17, now in a shelter with his family after losing their home built the year he was born. "But we never imagined one like this."

Human rights prosecutor Jorge de Leon Duque said he is calling for municipal authorities to remove 50 other families still in the area. He said if it's not done, he will seek a court order.

He said similar dangerous conditions exist all over Guatemala. The disaster commission, known as Conred, says there are 8,000 threatened locations.

"We have a huge risk that this could happen again," de Leon said. "You can't authorize homes in areas with dangerous conditions."

Conred issued at least two other reports, in 2001 and 2008, identifying Cambray as high risk, commission spokesman David de Leon said. One report followed the devastating Hurricane Mitch in 1998 and the other came after a landslide buried more than 1,000 people in 2005.

He said the recommendation that people not live in Cambray has stood since 2001, but the population there continued to grow. He said the agency can declare an area at risk, but it's up to a municipality to move people, short of a court order.

Conred Director Alejandro Maldonado said he warned Santa Catarina Mayor Tono Coro last December that the river was eating away at the base of the steep hill at Cambray and residents needed to be relocated.

Coro, who was mayor for 15 years, gave up the post in January for an unsuccessful run for mayor of Guatemala City. He could not be reached for comment Tuesday.

Coro offered his condolences and support to the slide victims on what appeared to be his public Facebook page Friday, and was vilified in a list of comments that blamed him for the disaster. The newspaper La Hora showed a woman displaying documents proving she legally bought her land in 2006, long after the municipality knew of the risk.

Conred's report was mostly about the risks created by the Pinula River and also recommended dredging. Municipal spokesman Manuel Pocasangre said local authorities decided to dredge the river and go door to door to warn residents about the dangers, but that people said they preferred to stay. The municipality has no documented proof it talked to residents.

"That's not true. No one came, no one brought anything, no one said anything," said Sonia Hernandez, 26, who grew up in the house her parents owned for 20 years. "Apparently the mayor was advised, but he didn't have the dignity to come and tell us the risk we were running."

Most people in the neighbourhood were homeowners and said they built their homes with proper permits.

Pocasangre said none of the homes were registered in Santa Catarina Pinula because the neighbourhood is also listed as part of Guatemala City, which is in a legal dispute with the neighbouring municipality over jurisdiction. But Pocasangre also said Santa Catarina provided services to the area and collected taxes.

Jeff Coe, a research geologist at U.S. Geological Survey, said that while there are no official studies, more people seem to be settling in dangerous areas like Cambray. It's not that people don't want to move, but that they often have few options, he said.

De Cifuentes said she and her family were scared after her mother-in-law was killed in the 2010 mudslide, but they stayed.

"We're poor, only my husband works, and we can't afford to rent a place," she said. "Here we've finished our mortgage payments."