The given treatment usually gets rid of all the mildew smell and stains. However, if you are not happy with the results, then you can bleach your towels and napkins. In 1 qt. of warm water, add 2 tbsp. of chlorine bleach and soak the towels in it for 15-20 minutes and then rinse them out using laundry detergent.
Before you do this, make sure you conduct a patch test by placing a drop or two of the solution onto a small area of the corner of the towels. This is to see if the towels are color safe. Hang them out in the sun for the final removal of the mild stains and smell. And that should give you mildew-free, fresh smelling and as-good-as-new bath towels.
Wash the towels in a washing machine using a normal detergent. Always remember to use hot water and avoid any fabric softener. Now, when the rinse cycle initiates, simply add a cup of clear ammonia in the washer. Give it a wait for sometime until the washer is done with its work. Once done, hang them out in full sun immediately or put them in the dryer.
It is likely that your towels may not be completely mildew-free from the first wash. But with repeated attempts, they will be.