Eight months into the rebuilding, work has come to a halt following a ruling from the Council of State that the competition for the rebuilding contract was conducted improperly.
The company that won the competition has been disqualified and ordered off the site. The government commission charged with the reconstruction of La Fenice - which in its heyday attracted such stars as Maria Callas - has been forced to start its paperwork from scratch. All over town, red-faced officials have been squealing with indignation. And nobody knows how long it will take to get the cranes working again behind the makeshift wooden hoardings on Campo San Fantin. "This is doing great damage, to the city and the country ... We're going to have to throw away billions of lire," fumed the mayor of Venice, Massimo Cacciari.
The dispute centres on an apparently minor part of the project - a house attached to the Fenice building which is not part of the theatre and which was undamaged by the fire. Impregilo, the construction company that won the contract, left the house out of its plans, while all the others put it in.
The Council of State argued that the Impregilo proposal was incomplete and should never have been taken into consideration. The building site will have to be turned over to the second-placed company, an Italo-German consortium, led by Philip Holzmann, of Munich. It remains to be seen how much of the completed work will have to be demolished, and how much of the building gear, painstakingly assembled by barges plying the narrow canals, can be kept on site.
In the best of cases, the reconstruction will be put back months, shattering dreams of a grand millennial reopening. Impregilo will have to be paid several billion lire for work completed and the city will be forced to buy the house adjacent to the theatre, half of which is in private hands and occupied by long-standing residents.
The Venice authorities could appeal against the Council of State ruling, but this would be so risky and time-consuming that they have decided not to.
"Our plans for the inauguration in December 1999 are definitely sunk. If we're lucky we'll have the theatre ready in the spring or summer of 2000," said the prefect of Venice, Vincenzo Barbati, who is also the commissioner in charge of rebuilding.
It is tempting to interpret the Council of State decision as bureaucratic cheese-paring. But closer inspection of the competition procedure suggests the Venice commission made some strange decisions - the result of incompetence or, as many Venetians suspect, an indulgent attitude towards Impregilo, a subsidiary of Italy's biggest and politically most powerful industrial conglomerate, Fiat.
All the evidence suggests the city intended to include the residential housing in the new Fenice project; councillors had even written to the residents, warning them that they might have to sell. Once the competition was launched, Holzmann specifically asked Mr Barbati's predecessor as prefect, Giovanni Troiani, whether the housing should be included. He replied with a circular letter to all entrants saying it should, "from the roof down to the ground".
It appears that Impregilo relied on an ambiguity in the circular referring to "the south wing of the theatre", not the south wing of the building as a whole. During the adjudication process, Holzmann's project - by the late Aldo Rossi - was deemed the most pleasing, aesthetically speaking, but Impregilo won because its shortcut made the reconstruction faster and cheaper.
Foul play? If nothing else, the fiasco has embarrassed Mr Cacciari and his image as a straight-dealing, competent mayor. "If anyone has messed up I want to know about it," he thundered as the building site closed last week.
The affair has infuriated the management at La Fenice, which until now has maintained a full programme of events at its temporary home, a prefabricated tent of a theatre erected on Il Tronchetto, an island built on an old rubbish tip that is now the biggest car park in Europe. After the fire, the so-called PalaFenice went up in three weeks, defying the odds to get the 1996 season started on time.
For the reopening, La Fenice had scheduled Riccardo Muti to conduct a choral concert, followed by a production of Tristan and Isolde directed by Bob Wilson. "We have to plan our seasons two years in advance, but now we don't know where we stand," said theatre spokesman Cristiano Chiarot. His desk was strewn with requests from foreign embassies and big companies for opening night tickets. For now, they are going to have to remain unanswered.