An almighty row has erupted in one of the world's most famous cities, a row consisting of two sides locking horns over the very thing for which it is famed - its beauty.

I speak of course of bella Venezia, whose Byzantine, Gothic and Romanic architecture and vast waterways filled with water taxis and gondolas, make it the much-visited and near-ethereal city we have come to know today. The Italians themselves affectionately call it their 'best work of fiction'.

But a world away from its captivating splendour, the great fuss has been caused by the punishing ramifications of the financial recession.

In the last two weeks, giant advertisements have been erected onto the scaffolding structures that are currently enshrouding so many of Venice's most enchanting sights.

While the need for renovation is understood, the billboards draped around infinite blocks of the city's embankment and all around St Mark's Square have been deemed repulsive and a cheap way for the government to bring in revenue.

The white limestone 17th century-built 'Bridge of Sighs', for example, has come to resemble something similar to a pale blue children's bouncy castle, and as one contrarian suggested the other day, now looks not too dissimilar to the replica that sits in the Venetian Hotel in Las Vegas.

Opposing the action is a collection of people who have aptly given themselves the name 'Venice in Peril' and their plight is largely against the city's mayor, Giorgio Orsoni.

Back in August, Orsoni was quick to pull down a perfume advertisement featuring semi-nude Hollywood actress Julianne Moore from St Mark's Square, declaring it an area which ought never to see such gestures of blind immodesty. But when questioned about the current billboards, he replied: 'If people want to see the buildings they should go home and look at a picture of it in a book.'

The billboards may well be hideous, but the city's inhabitants are rightly less preoccupied about their appearance and more concerned about what lies beneath: a city that has physically been left to crumble into disrepair and a financial state that boasts little else than weakness.

The economic recession has hit Venice hard. In what sounded like a throwback to Imperial Rome, Orsoni reminded his accusers that Rome has ceased the subsidies it once happily handed over to the city for architectural restoration, leaving Venice in urgent need of repair and with very little in the coffers with which to facilitate it.

Earlier this year the city's gondolieri were outraged when they were told that a majority of their customary oak and pine boats were to be replaced by cheaper and lighter fibre-glass alternatives.

Over the last decade, Venice has witnessed a steady evacuation of its locals, who are disillusioned by predatory streams of tourists and the stiflingly expensive way of life. Venice is no longer how the 18th Century Italian painter Canaletto once imagined it in his grand portraits that told the stories of busy piazze, hectic waterways, innumerable pigeons, animated chatter and a city alive with colour.

It's hard to believe that the Mayor would actively encourage the defacing of his city's captivating monuments, but Orsoni - a man undeniably under strain to move the city forward on few resources - steadfastly believes that by increasing Venice's capital in this distasteful, but temporary way, he is simply following the example set by Italy's other large cities, Florence and Rome.

Tussles between right and wrong rumble on, but it will do little to appease the fears of those who are unwilling to accept this modern way out of an ever-present financial quandary, and those who believe that Venice's best years are now all but over.

Has Venice sold its soul? Or is the city's Mayor right to make money any way he can?