In an open letter to Italian Cultural Minister Sandro Bondi, published in the Art Newspaper, the directors of the British museum and New York's Museum of Modern Art were among those who claimed that the posters "ruin your experience of one of the most beautiful creations of humankind".

For those who live in Venice, however, ubiquitous advertising is of little concern. Given Italy's dire financial situation, the buildings would be left to crumble if the likes of Bulgari and Diesel were not prepared to pay for restoration in exchange for poster space. Indeed, right now Venetians wish that one corporation in particular would confine itself to putting up hoardings and repairing the brickwork.

Instead, the Treviso-based, multi-national Benetton has bought the palace that houses the local post office and announced its intention of turning it into a shopping mall. Known as the Fondaco dei Tedeschi, the stunning medieval pile, whose multi-storey loggia gazes over an atrium open to the sky, will be transformed by "starchitect" Rem Koolhaas.

Venetians are folorn at the prospect of losing their beloved civic building. A local cultural association, 40xVenezia, are campaigning to ensure that Benetton respect a contractual clause that declares the Fondaco a public space. After Koolhass presented his project at the Biennale of Architecture in August, Venice's centre-left mayor Giorgio Orsoni, in an interview with local newspaper Il Gazzettino, described Benetton's attitude as "a little arrogant" and refused to approve what he descibed as "substantially a megastore".

What Benetton have failed to understand is that the post office is a crucial symbol of civic life in a city where the ratio of tourists to residents is 350 to one and growing. Every week sees another historic building converted into hotels; services at the local hospital have been drastically cut. So bleak is the situation that last year, a group of Venetians staged a mock funeral for the city itself. The death of the post office is another sign that La Serenissima is no more than prime real estate for sale.

The post office is not the only reason Benetton are persona non grata in Venice. Earlier this autumn, they terminated the rental contract of the Libreria Mondadori, a bookshop that has become a hub of local cultural life.

Thanks to sterling efforts by the proprietor Giovanni Pelizzato not a week went by when a book launch, conference, public debate or art show did not take place there. An oasis in a quarter that is otherwise a Disneyland of designer stores and luxury hotels, Mondadori is somewhere Venetians go to read a book, listen to an author, gossip with their friends and quarrel about politics.

Benetton say that they have done their bit. "We offered a rent at 25% of the going rate," said Federico Sartor, the press officer. "They turned it down so they are going away." Yet in an area where the likes of Ferragamo and Prada are paying up to ?350,000 a year, even a quarter of the going rate is beyond the reach of all but international brands.

Benetton promises that cultural activities will be part of the package both in Koolhaas' new empire and in the "international brand", as yet nameless, which is set to take over Mondadori.

The Venetians are not remotely convinced. "We don't want any cultural space, we want that one because it was made by and for local people," says Venetian writer Alberto Toso Fei.

Now a group of impassioned supporters are campaigning to save the bookshop. As well as a flurry of articles in the local press, there is a Facebook group dedicated to its preservation and a petition has been presented to the city council. Now, it is fervently hoped, the latter will put pressure on Benetton to reconsider.

Benetton have little sympathy with the public anger. "It's a fuss about nothing," said press office chief, Federico Sartor. "Thousands of shops in London change hands every day."

As anyone who has ever set foot there will know, Venice is not London. It is a unique, glorious, schizophrenic slice of urbanity that is simultaneously a provincial village and an international metropolis. If the former is sacrficed to the latter, both will ultimately die. For who wants to visit a city whose monuments have been preserved at the expense of its human inhabitants?