A street-cleaning crew inadvertently painted over a stencil of a rat by world-renowned graffiti artist Banksy, leaving officials in Australia's second largest city scrambling to explain the goof.

Melbourne's deputy lord mayor Susan Riley sent the cleaners to Hosier Lane last week, after residents complained about the dirty condition of the alley, a tourist attraction known for its elaborate street art.

But in the process they painted over a stencil of a parachuting rat by Banksy, a recluse who refuses to reveal his real name and is known as one of the world's best graffiti artists.

The crew was instructed to remove all graffiti from unapproved street art sites - which included the location of Banksy's goggle-wearing rat, City Of Melbourne chief executive Kathy Alexander said today.

"Unfortunately, the contractors were not made aware by us that that was an important piece and unfortunately that means the piece is gone," she told Australian Broadcasting Corporation radio.

Many of Banksy's artworks are created with spray-paint and stencils. He stencilled several images in Melbourne during a 2003 visit.