When the art world painted the city of dreams bright red

At the weekend, the Lisson Gallery in London threw a 30th anniversary party. But at this time of year the art world has decamped from the capital.

So Nicholas Logsdail, director of the Lisson, took over a mansion and gardens on an island a hop across the Grand Canal from Venice, played rave and jungle music on the lawns, and the cream of Britain's subsidised art sector let their hair down, forgot about their diminishing purchase grants and boogied.

When in Venice act like ... well, act like the British art world at play.

You could see them arriving in their hordes at Venice's egalitarian airport where the lack of VIP areas meant that the sweltering queues for water taxis included contemporary art collector Charles Saatchi and young family, Tate Gallery director Nicholas Serota, who had celebrated his honeymoon in Venice a few weeks earlier, and, making much more of a spectacle, the non-Brits at this international celebration of art's cutting edge.

In a sea of cigar smoke came the larger than life Thomas Krens, director of the Guggenheim Museum in New York. And behind him in the midday sun, a septuagenarian female New York collector slowly and solemnly donned a gas mask. The world's most romantic city isn't to everyone's taste.

But in the name of art ... in the name of art the British contingent takes itself off to the special exhibition Future, Present, Past, organised by Germano Celant, curator of the Biennale.

Celant is a master of European art-speak. The theme of his exhibition is, he says, "the flux which arises out of a dialectic of continuity and discontinuity ..." But he is nothing if not Italian. The "art" he has selected includes a bevy of girls posing in bras and panties. In a presumably ironic nod at Nineties museum practice, their underwear is even being sold at the gallery shop.

Having to study this artwork is tiring stuff for the British gallery directors, curators, press officers and assorted spouses. Happily, there is more rest and recuperation at hand.

The next piece of Chianti-aided networking is at the Venice Guggenheim's delightful canalside location. But here there is an undercurrent of tension beneath the air kisses. No British gallery is taking the Guggenheim's exhibition of Stuart Davis; deemed the father of pop art, he is nevertheless barely known over here. "Britain isn't on the circuit any more. It's as simple as that," snaps Philip Rylands, director of the Venice Guggenheim. There's some bad blood here. The British gallery directors don't like Tom Krens, the Guggenheim overlord. He sells off masterpieces, a Chagall and a Modigliani, to finance more acquisitions. And he franchises museums in Europe. It's all very bad form.

But the lead singer of the jazz band doesn't care. A Monty Python fan, she gasps mid-note as she sees Michael Palin walk in. The comedian is the latest recruit to the celebrity art circuit, there to champion Scottish art, he says enigmatically.

Back at the Biennale the critics are roaming the national pavilions and are puzzled. Not by the British artists; Rachel Whiteread's show is acclaimed, and former Turner Prize winner Douglas Gordon has won a special prize. But the other countries' exhibits are causing them trouble.

Outside the Icelandic pavilion two British critics debate whether the video they have just watched is of a swathe of ice or of a boiling geyser. "Ice would be too obvious for Iceland," says one. "There's a lot to be said for the obvious," retorts the other. More problems lie ahead.

The exhibit in the Japanese pavilion is said to be so fragile that only one person at a time can come in to see it. People in the queue are close to fainting in the heat.

The Austrian exhibit turns out to be piles of catalogues. The catalogue is about the Vienna Group, a literary circle of the Fifties. No one is quite certain whether this group existed, or whether the essays about it are part of the elaborate joke. The consensus is that it did exist, but it would have been a better joke if it hadn't.

Late night in St Mark's Square and more jazz at the outside cafes. A figure stands up alone and dances magically in the vast piazza. It is sculptor Tony Cragg, arms akimbo, making ostentatious sculptural shapes in his solo dance.

Next morning there is a champagne breakfast to welcome China into the warm, inebriated embrace of the art world. The People's Republic is exhibiting for the first time at the Biennale.

Painter Chen Yifei was exiled to the countryside as a labourer during the Cultural Revolution. He has recently been painting portraits of people in Tibet. Over the champagne he was asked if had found the Biennale a little decadent. He paused inscrutably. "It's hard to say," he smiled eventually.

We'll take that as a yes, then.