Cement mixers at the gate threatening the future of Italy's playground for the super-rich

There has never been anywhere quite like Portofino for showing off. This exquisite little fishing village snuggled in an armpit of Italy's Ligurian coast has been a magnet for the famous and super-rich for the best part of a century.

The guest book of the Hotel Splendido reads like a roll-call of old Hollywood. Here, Cary Grant and Clark Gable, Humphrey Bogart and Lauren Bacall sat at the green-painted iron tables looking out at the twinkling waters; David Niven and Rex Harrison and other deracinated European stars came to immerse themselves in a dream of the old Mediterranean.

Today, too, the super-rich still come, to potter about in huge yachts and nibble paparadelle Portofino - pasta in a pesto and tomato sauce - at Ristorante da Puny, the best and most discreet in town. Here, Silvio Berlusconi, among others of the mega-rich, owns a villa in the woods - a holiday home which, as he lamented in an interview with The New York Times, he has been too busy to visit for years.

Portofino's charm was that it never changed: for Maria Callas as for Madonna, the views from the hills over the sea, or from the terrace of the Hotel Splendido, were always perfect, always the same. It was back in 1935 that the countryside in which it was couched became a protected park. As Giulia Mozzoni, president of the Italian Environment Fund put it, "Portofino is one of the most important regional parks and, in a certain sense, though very small, it is the symbol of Italian parks."

But, from next week, Portofino will begin to change. The town council is set to pass new rules governing the Park of Portofino in which the town is contained, which will permit an important assault on the area's environment.

Under the new regime, for the first time in nearly 70 years, new development will be allowed in Portofino. And the cement mixers are at the gates: a large new hotel is to go up in the middle of the town; the existing Splendido, a former monastery and the town's most luxurious hotel, is to gain an extra floor; roads through the surrounding parkland are to be widened. The park itself, significantly enlarged in 1986 to include a large area of wooded hills to the town's north and west, has been reduced to its original, 1935 dimensions.

The extra area is now to enjoy only "medium protection." In the eyes of leading Italian environmentalists, Italy is about to fail a major test. Right across the country, apparently stringent laws protecting the environment are flagrantly abused. Illegal building within national parks is rampant. National parks in the south have become favoured dumping grounds for toxic waste trucked from the factories of the north by Mafia gangs. Some national heritage sites, notoriously the ancient Greek remains at Agrigento in Sicily, have become completely infested by illegal building, which corrupt local governments do nothing to contain. And often Mr Berlusconi's government seems to be on the side of the abusers.

Illegal builders have enjoyed a major amnesty in this year's budget, which has led to a further spurt in illegal construction. Last week, Mr Berlusconi's party tabled a parliamentary motion to allow hunting inside the national parks, arguing that the shooters and their prey enjoy "a natural symbiosis".

But Portofino, many dared to believe, was exempt: soon after returning to power in 2001, Mr Berlusconi himself had said the area must remain "inviolate". Here, after all, the power of big business was up against not merely environmentalists but also the money muscle of the super-rich visitors and part-time residents, many of whom own villas in the woods, all of whom had an expensive stake in Portofino remaining bellissimo. Now, however, the developers are in the ascendant.

Like so many other promising plots of wilderness around the world, Portofino was an English discovery. Montague Yeats Brown, the British consul in Genoa in the late 19th century, hit upon the place when it was still a real fishing village. He was stunned by its charm and bought the castle on the headland above the port.

Others trod in his footsteps, yachtsmen discovered the beauty and tranquillity of its harbour, the Hotel Splendido threw open its doors in 1901, and slowly Portofino's fame spread.

By the 1950s, it had become the favoured Italian backdrop for all Hollywood's biggest stars: Rex Harrison built a villa in the woods, a host of others came and went, rubbing shoulders with the Windsors and Prince Rainier and Princess Grace of Monaco. And Portofino has kept its cachet: if Rod Stewart and Madonna don't ring the same bells as Frank Sinatra and Ava Gardner, maybe it's because celebrity itself has gone down in the world.

Less glittering visitors often find Portofino is altogether too much: too perfect, too good to be true. But the arrival of new development is an ominous moment: if this cannot be defended, what can? "Beyond its importance per se," wrote Piero Ottone in La Repubblica, "Portofino is also a touchstone. For those defending the environment and the countryside, taking account of the common interest, it is a battle for civilisation. On the other side is the greed for gain."