Michaella McCollum Connolly, 20, from Belfast, Ireland, and Melissa Reid, 19, from Scotland, are accused of transporting around 6 kg (13.2lbs) of cocaine each while attempting to board an Air Europa flight to Palma de Majorca, Spain via Madrid at the Jorge Chavez International airport in Lima, Peru.
Melissa is accused of having 18 packets of cocaine, weighing 5.7kg, while Michaella is said to have been found with 16 envelopes of the drug, a total of 5.8kg.
Diplomats have confirmed they are helping an Irish woman and a British woman arrested in Peru over alleged drug trafficking offenses.
The Foreign Office in London confirmed it was helping a British national.
"We are aware of the arrest of a British national in Peru this week and are providing consular assistance," a spokeswoman said.
Ireland's Department of Foreign Affairs said it was also providing consular assistance to the family of an Irish woman being held in Peru on suspicion of drug trafficking offences.
As far as their parents knew, Melissa and Michaella were spending the summer working in bars and clubs around the Mediterranean.
"As far as we knew, Melissa was in Ibiza. That is where she has been. She met the other girl out in Ibiza. I don't know anything else about her," said Debra Reid, Melissa's mother.
According to police, the arrest was made last Tuesday, but the news only made headlines once it was discovered that Connolly had been reported missing by her parents, after she failed to answer her phone or update her Facebook page for almost two weeks.
They say they did not know the aspiring model had left the popular Ibizan party town of San Antonio, where she had been working occasionally as a nightclub hostess since June.
It is feared they may have been targeted by one of the drug gangs operating there that offer a lot of money to "mules" who carry cocaine from South America to Europe in their suitcases.
The pair have been held separately in maximum security cells at Lima's notorious Santa Monica de Chorrillos prison, under heavy armed guard since their arrest.
The Mirror spoke to a security guard at the prison, who allegedly described the girls as "terrified and emotional."
"Ever since they arrived both have refused to eat or drink. They have starved themselves while saying they are innocent. They have remained in their cells and just smoke cigarettes. Between them they have little in the way of possessions but for legal reasons they are being kept apart," the guard reportedly said.
"We take drug smuggling very seriously here in Peru and foreigners are treated just like anyone else."
"They have repeatedly insisted on their innocence but that is for the courts to decide. One of them has said her cell is like being in hell but if they are found guilty they will see what hell is really like," he added.
Asked how the girls were bearing up, the guard replied: "One has gone to pieces. She is hysterical. She just keeps crying, saying there has been a huge mistake. They are both starting to realize just how serious this is."
If Melissa and Michaella were each convicted of the amount allegedly found in their own luggage, they could face seven years. But if one was found guilty of being responsible for the entire haul she could be jailed for 15 to 25 years.
Although originally built to hold 230 inmates, Santa Monica de Chorrillos women's prison houses more than 1,000, including some of the inmates' children. The cramped jail, surrounded by high walls, has no running water and often no electricity. Food is said to be rationed so inmates can eat three times a day, and HIV, tuberculosis and the use of drugs are very common.
Ireland's recently retired consul-general in Lima, Michael Russell, described conditions in Peruvian jails as horrible, adding: "It's all a matter of money, quite frankly. You have to buy your space, you have to buy your food. If you don't have money, you suffer quite a lot."
Peru has the second highest rate in the world for arrest charges on people suspected of transporting drugs.
A total of 248 people, or drug mules, were arrested at Lima's Jorge Chavez international airport in 2012. Nearly 1,600 kilos of the illegal drugs, mainly cocaine, was confiscated from the drug mules arrested.
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