The boy is aged about six - the age Ben would be now - and Greek authorities say they are prepared to carry out DNA tests if the Needhams feel he might be Ben. The child is said to have told Stratos Bakirtzis, a private investigator that he had been given to the gypsies because because his parents did not want him.
Ben's grandparents, Chris and Eddie Needham, who are staying on the holiday island of Kos, were telephoned on Tuesday by the deputy head of the Greek police authority and asked to visit Salonika, hundreds of miles away, where the child is living in a camp with a middle-aged woman. Her husband is in prison and has told police he bought the boy from another gypsy.
But there is no evidence to suggest that the boy is Ben, the blue-eyed youngster who disappeared in July 1991 when he was 21 months old.
Police swooped on the gypsy camp 50 miles north of Salonika yesterday morning after Mr Bakirtzis claimed on television to have found Ben. They took away the child while his father was seen and asked to produce the boy's documents.
Later the child was released from "protective custody". The gypsies are being kept under surveillance while the Needhams make plans to go to see for themselves.
A video film of the boy made by Mr Bakirtzis was seen yesterday by Ben's mother Kerry at her home in Foxhill, Sheffield.
She said she could not tell if it was him: "It is frustrating - but I won't let myself get hurt by it. I have got to keep an open mind because if it does not turn out to be Ben, I am going to be heartbroken again."