The arts show could be held in the city in 2009 at the earliest, the sources said, and officials are currently communicating with the organisers in Italy through a third party.

The sources said the government was prepared to spend tens of millions of dollars on the project. Details of the proposal, such as the venue and the type of exhibitions to be held, have not yet been finalised.

Since its foundation in 1895, the Venice Biennale has been one of the most prestigious cultural events in the world and draws participants from around the globe. It promotes the avant garde and has art, architecture, film, dance and music components. The Biennale's 52nd International Art Exhibition is now being held in Venice.

The press office of the Venice Biennale in Italy could not confirm that talks were being held to hold the event in Hong Kong. But its spokesman said the show had not been held outside Venice since the 1930s.

The biennale would be one of the biggest international events to be staged in the city following the World Trade Organisation conference in 2005, the International Telecom Union last year, the 10-year anniversary of the handover this year, the Olympic Games equestrian events next year and the East Asian Games in 2009.

'We want to keep Hong Kong as the capital of events in the region and to have the Venice Biennale held in Hong Kong could boost our status,' a source said. 'This could also help cultivate the growth of the arts scene in Hong Kong to facilitate the development of West Kowloon.'

The sources said officials were also carrying out a feasibility study on how much the public would welcome the event.

Bernard Lim Wan-fung, professor of architecture at Chinese University, said he supported the idea of Hong Kong holding the mega arts show.

'Our city has all the necessary conditions for holding a biennale. Many people in the cultural arts field have been discussing it for a long time,' he said.

Professor Lim said the Hong Kong Institute of Architects, Institute of Planners, and Hong Kong Designers Association would hold the first Shenzhen-Hong Kong Biennale for architectural and urban arts in December.

Ada Wong Ying-kay, a member of the consultative committee on the core arts and cultural facilities of the West Kowloon Cultural District, said it would be good to bring the international show to the city. But she said Hong Kong should also develop its own brand.

'Of course we can always spend millions to bring the Berlin Philharmonic and other big shows to Hong Kong. More importantly, we have to cultivate our own arts culture and encourage creativity,' she said.

'But this society may be just too conservative to take the Venice show, given what has happened to G.O.D. over the past two days,' she said, referring to the police raids and arrests of staff at the homewares store for selling a T-shirt printed with 14K in Chinese characters. '[The Television and Entertainment Licensing Authority] may have to turn a blind eye if the biennale comes to Hong Kong.'