Business groups on the island say pulling down 22 hotels will leave hundreds out of work and hit the tourist trade hard.

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Lanzarote court ruled 22 hotels were illegally built.The Canary Islands supreme court has annulled the hotels' building licences after it was ruled that two councils had openly flouted a ban on building hotels. Lanzarote council will now consider whether to grant an amnesty, or send in the bulldozers.A police unit which fights organised crime has been called in to investigate whether the former mayors of Yaiza and Teguise granted illegal building licences in return for backhanders from property developers.The police investigation comes amid fears of a repeat of the widespread civic corruption scandal that led to the dissolution of Marbella city council in 2006.In Lanzarote, eight five-star hotels, 10 smaller hotels, and four others under construction were declared illegal. In all, they account for 7,721 hotel rooms or apartments on the island. Top-of-the-range hotels that could be pulled down are the Meliá Volcán, Iberostar Papagayo, Gran Castillo, Natura Palace, Rubicón Palace, Papagayo Arena and Son Bou. The court action follows efforts to gentrify the image of the holiday island beloved of British tourists.

In 2000, authorities limited the number of new hotels and those few that were to be given permission had to be four stars or above. But officials at Yaiza and Teguise councils ignored the limit and granted licences for thousands of "tourist places" or holiday accommodation, investing €270m (£212.1m) of public funds. The EU granted €36.5m to 11 of the hotels now ruled illegal to boost tourism on the island.Carlos Espino, a Socialist Lanzarote councillor, said: "These councils broke the order which we had put in place to preserve the island, which is a biosphere reserve. We will not have an amnesty. We will knock down what we have to."Business groups on the island say pulling down 22 hotels will leave hundreds out of work and hit the tourist trade hard. Instead, authorities may bring in an amnesty in the same way as the council in Marbella did when it discovered thousands of illegally built hotels and homes, many belonging to Britons.In Marbella, an international police investigation was launched into claims of civic bribery, cronyism and embezzlement. The mayor, head of urban planning and police chief were arrested and property worth €2.4m was seized.Instead of demolishing scores of illegal properties, authorities ordered property developers to hand over rural land to public ownership. The court action against the illegal hotels in Lanzarote was taken by the council and the César Manrique Foundation, which is named after the late architect who helped to ensure there were no high-rise hotels or garish advertising hoardings on the island.
Manrique's influence went a large way to ensuring the Canary island avoided the same fate as the concrete jungles of the Costa del Sol or Costa Blanca.
More court cases are expected to follow against other hotels on Lanzarote.