Could laneway graffiti be worth more than your average house?, Yazzy's at www.williamverdult.com

Andrew McDonald, director of the Citylights public art project, with British graffiti artist Banksy's "little diver".
Photo: Michael Clayton-Jones

IT'S barely a metre tall, and most of the time hides behind a wheelie bin in a narrow Melbourne laneway — a faceless grey figure in an old-fashioned diving mask and duffel coat.

But as one of Melbourne's few remaining pieces of stencil art by the elusive British graffiti artist Banksy, the little diver gained further cachet yesterday when another Banksy work on a London wall fetched £208,000 ($A453,700) on an eBay auction.

Banksy's diver adorns the rear of the Nicholas Building on the corner of Swanston Street and Flinders Lane. The 10-storey building, built in 1926, was placed on the State Heritage Register last October, although the listing owed more to its architectural features such as the ground-floor Cathedral Arcade than the Banksy artwork.

The City of Melbourne has now moved to further protect the Banksy diver, holding discussions yesterday with the manager of the Nicholas Building to find "appropriate methods to protect the stencil by Banksy".

Banksy is believed to have painted the diver during a visit to Melbourne in 2003, along with "a heap of rats", of which just a few remain in the city's laneways, says the founder and director of Melbourne's Citylights public art project, Andrew McDonald.

Despite the Banksy stencil's value, Mr McDonald said he did not believe it should be preserved. He cited the example of the State Heritage-listed mural painted in Johnston Street, Collingwood, in 1984 by the late New York artist Keith Haring, which Haring insisted be allowed to degenerate.

"It's strange because graffiti isn't meant to last, it's ephemeral," Mr McDonald said. "So trying to save it is a pretty funny thing to do. I'm sure that irony's not lost on Banksy. And there's a fair bit of irony in somebody selling a wall."

The London work sold on eBay appeared on the wall of a Portobello Road building in September. It features a picture of an old-fashioned artist painting the artist's name on the wall. The auction attracted 69 bids, with the winner now required to pay for a replacement wall for the building if he or she wants to take the artwork home.

Banksy has become arguably the world's most famous graffiti artist, with fans and buyers of his work including Angelina Jolie, Brad Pitt and Christina Aguilera. He is also elusive, with even his agent claiming never to have met him.

Once considered no more than visual pollution, graffiti and stencil art has now gained acceptance as a valid contemporary art form, with Melbourne considered the Australian hub of it. Last year the National Gallery of Australia purchased its first collection of street art, comprising 300 stencil designs by more than 30 Melbourne artists.

In a 2006 article in Britain's Guardian newspaper, Banksy referred to Melbourne's street art as "arguably Australia's most significant contribution to the arts since they stole all the Aborigines' pencils".