Spain's Govt to dissolve the town hall in Marbella

Deputy Prime Minister Maria Teresa Fernandez de la Vega said an auditors' commission would take over the tourism hotspot's administration until scheduled elections in May 2007. Resort city of Marbella

The Spanish government on Friday formally ordered the dissolution of the town hall in the resort city of Marbella, where the mayor and 11 others have been arrested in a multibillion-Euro real estate corruption scandal.

It was the first time since 1978 that Spanish government had taken such a step.

Deputy Prime Minister Maria Teresa Fernandez de la Vega said an auditors' commission, to be designated by government authorities of the southern province of Malaga, would take over the tourism hotspot's administration until scheduled elections in May 2007.

She said the government took the unprecedented move "owing to the grave judicial charges" involved.

Besides mayor Marisol Yagüe and former Marbella urban planning chief Juan Antonio Roca, others arrested last week included town councillors, lawyers and building contractors. The city's local police chief was one of several people freed on bail in the probe.

The suspects face possible charges of laundering money from real estate developers, who allegedly paid exorbitant amounts for building permits in the southern Costa del Sol resort area.

Police have seized or impounded more than euro2.4 billion (US$2.9 billion) in property, including helicopters, thoroughbred horses, artwork and antique guns in the investigation.

Properties raided as part of the investigation included a ranch that raised fighting bulls.

Marbella was a magnet for the jet set from across the world and even Saudi Arabian royalty during the 1970s and 1980s.

Marbella's most prominent mayor, the late Jesus Gil, was indicted numerous times in the 1980s and 1990s on corruption charges, many dealing with real estate fraud in Marbella.