Mayor Giorgio Orsoni, who belongs to Prime Minister Matteo Renzi’s Democratic Party, was placed under house arrest on Wednesday morning in a sweeping corruption investigation into the multi-billion-euro flood barrier project to save the island city from rising sea levels.
Prosecutors have also called for the arrest of Giancarlo Galan, a senator and former president of Veneto, as well as European Parliament member Lia Sartori - both from former prime minister Silvio Berlusconi's Forza Italia (Go Italy) party.
The scandal engulfed Venice at the start of peak tourist season, with the arrival looming of most of the 20 million visitors who come to the famous canal city every year.
"Today is a sad day for the entire city. Our name is being dragged through the mud," Scarpa said in a statement.
"The local political class needs to change the way it operates... We need new, honest and clean faces," he said.
Political corruption was also major reason behind calls for Veneto independence from the rest of Italy earlier this year.
Meanwhile, the anti-establishment Five Star Movement was quick to seize on the scandal as an example of political corruption involving members from both the ruling centre-left Democratic Party and the main opposition Forza Italia party.
Luigi Di Maio, a leading member of the Five Star Movement, said on his Facebook page.
"What more do these parties need to do to no longer deserve a vote from Italian citizens?"
Galan inaugurated the project together with Berlusconi but plans for the flood barrier had been discussed for decades before then - ever since a catastrophic flood in 1966.
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The need for protection has become ever urgent as extensive flooding now wreaks havoc every year and new data shows the city sank 23 centimetres during the 20th century while water levels have also slowly been rising.
The total cost of the project is estimated at around €5.5 billion and involves dozens of contractors working on more than 20 kilometres of the Venice lagoon to build 78 mobile flood barriers that rise from the seabed when needed.
The "acqua alta" (high water) in Venice is caused by a combination of tides, currents and strong winds and can flood much of the city including St Mark's Square.