Council officials have painted over a Banksy graffito sketch from which a reworked version was derived as the cover artwork for the 2003 single Crazy Beat by the band Blur.
The artwork – a cartoon of the royal family waving from a balcony – had been left untouched on the side of a block of flats in Stoke Newington, east London, for eight years before Hackney council intervened last week.
Officials removed the sketch by Banksy – whose works have sold for hundreds of thousands of pounds – as his largest exhibition to date, in Bristol, prepared to close. The exhibition has attracted over 300,000 visitors since 13 June, raising £45,000 in museum donations, and is estimated to have been worth £10m to the local economy.
Banksy vs Bristol Museum featured more than 100 works of art. The notoriously secretive artist was reported to have been secretly adding new installations to the exhibition by night.
A Stoke Newington blogger known only as Kris broke the news of the artwork's removal.
She reported that council workers said they had told their employers about the importance of the artwork. "We knew it was a Banksy, love. It's a Stoke Newington landmark; we know that. We told them, but they wouldn't listen," wrote Kris.
The owner of the building, Sophie Attrill, told the Hackney Gazette that she was devastated when she saw the wall being painted.
"I looked out the window and saw what they were doing, so I ran downstairs and I told them to stop," said Attrill. Hackney council said it tried to contact Attrill before ordering the artwork to be painted over, but notices asking her to remove or cover up the piece had not reached her address due to the Land Registry having the incorrect contact details.
Alan Laing, the Hackney council cabinet member for neighbourhoods, said the council removed all graffiti regardless of artistic value.
"Hackney council does not make a judgment call on whether graffiti is art or not, our task is to keep Hackney's streets clean. We made four attempts to contact the owner of the property to inform her of our intention to remove the graffiti," said Laing.
"We are now speaking with her about how to resolve the issue."
It's not the first time Banksy has had his street art removed by authorities. In October last year Westminster city council removed a mural from Newman Street in central London after the deputy council leader, Robert Davis, said keeping it would be "condoning" graffiti.
In 2007 a piece showing a monkey preparing to blow up a bunch of bananas at Waterloo station in London was painted over by staff.
• This article was amended on Friday 4 September 2009. The original implied that the Hackney graffito was identical to that used on the Blur cover. And the photograph that accompanied our original webpage article did not show a Banksy work. This has been corrected.
