Italy's interior ministry has ordered migrants in the village of Riace, depicted as a model for integration, to be transferred to reception centres.
It follows the arrest on October 1 of the town mayor, Domenico Lucano, accused of organising "marriages of convenience" for migrants who have been denied refugee status or visas and of byspassing a public tender process to award a rubblish management contract to co-operatives with ties to migrants.
His house arrest was celebrated by MS5, one of the two ruling parties, in a blog post on October 2 declaring that "Riace was not a model, the era of immigration business is over."
But it also triggered a national debate as well as protests in support of Lucano, attended by thousands.
Lucano grabbed headlines around the world for his approach to immigration such as allowing 450 refugees to settle among the small village in Calabria, in south-west Italy, during the European migrant crisis which he argued would revitalise the small community.
His work saw him come second runner-up in the 2010 World Mayor competition and he was also listed as one of Fortume magazine's 100 greatest world leaders in 2016.
But an October 9 resolution from the Interior Ministry, headed by Matteo Salvini, the head of the anti-immigration, eurosceptic League party, ordered the closure of all migrant projects in Riace and the transfer of the migrants to reception centres.
In a tweet on Saturday, Salvini said that the country "cannot tolerate irregularities in the use of public funds, even if there is an excuse to spend them on migrants."
Mario Oliverio, president of the Calabria region, described the ministry's decision as "absurd and unjustified."
"I hope that this decision does not hide the goal of erasing an extremely positive reception experience, whose recognition and appreciation is widely recognised at the international level.
"I ask the Interior Minister to review this decision, he wrote in a Facebook post on Saturday.
The Association for Juridical Studies on Immigration, which defends Lucano and the municipality of Riace, has also condemned the ministry's resolution.
Its vice-president Gianfranco Schiavone told La Repubblica newspaper that the ministry's decision seems to more about the overall model than the alleged illegality of some of the projects piloted by Lucano.
"This report makes clear the lack of willingness to talk by the ministry," Schiavone said.
"What is striking is the total disproportion between the provision and the reality of the project," he added.