Of all the pomp and pageantry Venice is famous for, none of its festivals has quite the allure of Carnival. Set against the city's fairytale backdrop, Carnival is the perfect marriage of age-old beauty and high drama. Enjoying its heyday in the 18th-century, the pre-Lent celebration quickly became a cover (quite literally) for dirty Doges and general transgression for the masses ? before being snuffed out by that conquering killjoy Napoleon in 1797. It was also banned by Mussolini in the 1930s.

These days the event is facing a mightier foe: tourism. Resuscitated in the late 1970s, partly as a way of filling hotel rooms in the winter, Carnival today sees Venice at its most packed, preened and prohibitively expensive. The sentiment among many Venetians is that the 10-day programme of events is little more than a sponsored sell-out. Among the sponsors of this year's themed Sensation of the Six Senses event are Swatch watches and Coca-Cola.

Giuseppina Giudice has lived in the district of San Marco all her life. "Venetians don't dress up for Carnival after the age of 10," she says. "All we see of Carnival is a river of strangers who flow into town to feel 'Venetian', and who fill it, buy a cheap made-in-China mask and leave with nothing but photographs of St Mark's Square. We pray that we don't get sick, go into labour or forget to buy any groceries because there's no way to reach anywhere in less than an hour."

Tired of the sponsored pantomime, which nets the city around ?100m (£88.5m) each year, two social networking groups, 40XVenezia and Venessia.com have for the first time organised their own independently-funded Carnival party, to which visitors are invited. No pricey tickets or fancy ball gowns ? just a good old Italian street party.

Claudio Scarpa, general manager of the Venetian Hotels Association, which was instrumental in getting Carnival off the ground again in the 70s, has given his backing to the street party: "The real Carnival was a way for Venetians to forget their hardships for 10 days. Carnival now is for tourists. We need more events organised by locals, to help them [reclaim] their traditions."

Well over 1,000 people are expected to join in the street party at a small piazza near the Rialto Bridge. Scarpa said that the strong euro and economic situation has meant that hotels are not as full as they usually are and that visitors can still find last-minute deals on veneziasi.it. He also said that lots of visitors will stay in Mestre, Vicenza and Treviso and get the train in for the day.

"Our Carnival celebration will be on the street, not in a palace. We're leaving those parties to the nobility," said Matteo Secchi of Venessia.com. "It is organised by Venetians for Venetians ? and anyone else that wants to join us."

The theme is "Festa Indiana, Veneziani sensa Riserve" (Venice without reserves). The publicity poster depicts the city's famous winged lion ? a symbol of freedom and power ? dressed as a Native American.

The message to the administration is clear. "This is not Disneyland: people live here," said Secchi. "We feel like Native American Indians ? a dwindling populace confined to our 'reservations'."

For Venezia.com in particular, Festa Indiana is an opportunity to inform revellers from around the world about Venice's population plight. The city is haemorrhaging residents at a rate of 1,000 a year. Today's 60,029 residents are swamped by 21 million tourists and the fear is that once locals have gone, taking their traditions and culture with them, Venice could become little more than a theme park.

"Tourists are welcome to our party ? the more we can inform them about the real Venice rather than the postcard Venice, the better," said Secchi.

Leaflets, in English, will be handed out to tourists who can get masked for free by fellow Native Americans, once they arrive.

"I'll give it a chance, although I'm not sure how local it will be. There are few real Venetians left and most of them will try to leave town," said Giudice.

Getting there

Festa Indiana, 23 February, Pescheria di Rialto, San Polo. The afternoon will be family orientated, with music, drinks and food and will continue into the evening with bands and DJs.

Carnival: 13-23 February.

Flights are currently available with BMI for £126rtn (including taxes and fees) flying from London Heathrow to Venice Marco Polo on 21 Feb, returning on 24 Feb.

Find details on getting the train from London St Pancras to Venice on seat61.com