Italian authorities have called off an auction offering a 99-year-lease on a "haunted" island in Venice's lagoon after dismissing the top offer as too low, campaigners say.
Poveglia, like many isolated islands in the Venice lagoon, used to be a confinement station for plague victims, and was later the site of a hospital. Uninhabited since the 1970s, legends have it that it is full of ghosts.
"It will remain in the hands of the state because" a 513,000 euro ($A751,961) offer from Luigi Brugnaro, a local businessman, was judged "not adequate," the association Poveglia per tutti (Poveglia for all) said in a statement.
Poveglia per tutti - a community group that sprang up in revolt at plans to "privatise" the island - had submitted a rival bid for 472,000 euros, with the aim of turning the site into a self-governed public resort.
"We decided not to try to beat the offer, even if we had the means to outbid it by 1000 euros, because we were counting on authorities to call off the auction altogether," Lorenzo Pesola, a member of the association, told DPA.
He said Poveglia per tutti would now petition the central government in Rome to manage the site on behalf of the local community.
Pesola said the association cut off the Venice municipality from its plans 10 days ago, just before Mayor Giorgio Orsoni, who had supported the Poveglia per tutti initiative, was placed under house arrest on corruption charges.
"It seems that it was a far-sighted move on our part," Pesola commented, insisting it was "unlikely" that Italian authorities would try to put Poveglia up for auction for a second time.
The government is selling some of its assets in a bid to reduce Italy's huge mountain of debt, standing at around 135 per cent of its gross domestic product, against an European Union limit of 60 per cent.
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