THIS boutique hotel is housed in an 18th century building right on the Grand Canal with stunning rooms bedecked with tapestries and gorgeous fabrics, antique Murano chandeliers and marble bathrooms. Part of the legendary Bauer Hotel, it's just 0two minutes from St Mark's Square.

What's the best thing?

Apart from the location and sumptuousness, there are numerous things vying for 'best' accolade. The Palazzo has its own intimate reception area and the staff are both charming (not always a given in Venice) and the soul of discretion.

Then there's 'Settimo Cielo', literally Seventh Heaven, the exclusive rooftop terrace (highest in the city) where breakfast is served and with views over the city and lagoon that are breathtaking. No wonder Catherine Deneuve opts for Il Palazzo when in Venice.

Will it break the bank?

Double rooms from 290 including breakfast. Suites with views are 690. A 'Romance' package for two with three nights B&B, one dinner, a gondola ride and champagne in the rooftop whirlpool costs 2,315.

Want to know more?

Bauer Il Palazzo, San Marco 1413/d, Venice 30124, Italy; 0039 041 5207022, www. ilpalazzovenezia. com Roslyn Dee