THE Spanish Government dissolved the city council of Marbella yesterday as part of a €2.4 billion (£1.7 billion) corruption investigation that has led to the arrests of 23 people — one the town’s mayor.

The decision was announced after an emergency Cabinet meeting. María Teresa Fernández de la Vega, the Spanish Deputy Prime Minister, said: “This Government does not tolerate, nor will tolerate, nor will ever protect the corrupt.”

No democratic Spanish government had ever taken such a step before, she said, but it was necessary to defend “public progress” and restore faith in civic integrity.

Police raided the town hall and have also seized property, including cash, art, thoroughbred horses and a helicopter.

The Costa del Sol resort, popular with British holidaymakers and second-home buyers, will be managed by a temporary team from nearby Málaga until the next municipal elections in May 2007.

Madrid acted after Marisol Yagüe, the Mayor of Marbella, her deputy, councillors, developers, notaries, lawyers, businessmen and the local police chief were arrested for their alleged roles in a racket said to have been headed by Juan Antonio Roca, the chief of urban planning.

Señor Roca, 53, faces charges of corruption and money laundering and is one of 11 suspects being held in prison awaiting trial. He is accused of heading a gang that obtained at least €2.4 billion in cash, valuables and property as bribes for permitting thousands of illegal property developments and granting municipal contracts.

It is also claimed that he regularly turned down developers’ planning applications then bought the land himself, changed the rules and built his own developments.

During his 15 years in office, it is alleged that Señor Roca approved some 600 developments, receiving in return at least 10 per cent of the villas, flats or land involved.

The Spanish newspaper El País reported how Señor Roca once told a businessman: “I am City Hall. I have all the power.”

Rafael del Pozo, the head of the local police, has been summonsed to appear in court today. Señora Yagüe, who is being held in custody, is charged with a variety of offences including receiving four cars from a businessman, now jailed, in return for the right to run the town’s illegal parking tow service.

Among some of the trophies from the gang’s corrupt reign that the police have seized are 340 works of art, including paintings by Joan Miró, a live tiger, a helicopter, 14 luxury cars, 133 thoroughbred horses and two palatial homes in Madrid.

Marbella, a former fishing village, became a magnet for jet-setter and society figures during the 1970s and 1980s. But corruption scandals have tainted its image. Jesús Gil, a former mayor, was charged with planning abuses in the 1980s and 1990s.

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