"These are our own costumes. Our tailor in Germany made them for us," they said, beaming in the sun.

The cheerful group is among the throng of visitors who have descended on Venice this month to abandon the modern world and take part in a hedonistic tradition that pre-dates the swinging 60s by more than a couple of centuries.

The pre-Lent party in Venice known as Carnival traces its roots back to 1162 when La Serenissima Repubblica di Venezia or the Most Serene Republic of Venice defeated a rebellion led by Ulrich, the Patriarch of Aquileia. The city-state's victory was celebrated with the slaughtering of pigs and bulls.

Carnival's most renowned period, and the vintage era that most of today's costumes reflect was the licentious 18th century, when royalty and commoners mingled in disguise to flirt and gamble.

The party ended when Napoleon conquered Venice in 1797, but the tradition was restored in 1980 to revive the economy of a city that was founded on a lagoon 1,500 years ago.

German and French are the languages most commonly heard in the small streets of Venice during Carnival these days, where tourists jostle each other for photo opportunities of the elegant costumes and exotic masks created by local artisans and worn by revellers for the balls, parades and parties.

"We have clients from Europe, to America and Australia and everybody wants to be king," Venetian costume designer Stefano Nicolao said at his busy atelier.

But the new kings of Venice do not always favour the opulent dresses inspired by paintings of the Venetian masters.

"Several tourists come here with their own costumes in their bags," said Guerrino Lovato, the first artist to relaunch the use of masks when the Venice carnival was reintroduced in 1980.

Since its reintroduction, craftsmen like Nicolao and Lovato have stitched costumes replete with pearls and silks that can take weeks to make and are worth thousands of euros.

"A new generation of craftsmen opened laboratories and studied archives, creating masks in papier-mache that are now imitated everywhere in Venice," the 54-year-old Lovato said, sporting a white beard and a black beret.

Since then, craftsmen like Nicolao and Lovato have created costumes made of silk and covered in pearls which can take weeks to sew and are worth thousands of euros.

But the boon has turned into a bane for some small artisans unable to cope with a booming demand and compete with the cheaper alternatives produced elsewhere.

Lovato turned his activity into a museum two years ago. Nicolao, whose accessorized costumes are easier to sell, also rents some 10,000 costumes.

"A historical costume can cost up to 2,000 euros to produce and 35 hours to hand stitch," said Nicolao.

Rentals cost from 150 to 350 euros, enough to satisfy regular folks mixing with the elite in the masked balls held in private palaces on the Canal Grande, the city's main waterway.

All-night parties like the Casanova ball, named after the Venetian playboy, invite guests to forget everyday life and abandon themselves to scenic performances in candle-lit rooms. Dance music often finishes off the less elegant events.

A ticket for the Ballo del Doge, the most exclusive of the Carnival balls, costs up to 1,400 euros. But cheaper solutions are also offered.

To contain the commercial drift of the carnival, the organisers have anchored the event to tradition.

A towering bull made of wood and straw, which during the carnival has been moored at Punta della Dogana, will be burnt on Tuesday in a tribute to the celebrations of 850 years ago to herald the start of Lent, the Christian season of fasting and reflection ahead of Easter.

(Reporting by Antonella Ciancio)

• A Permanent Economic Emergency