The graffiti artist, known as “CDH”, submitted a “hoax” grant application to the council to paint a wall in Docklands. After requesting his grant in the form of a cheque, he then ripped it into three pieces, in a protest, he says, at council's “bureaucratic” grants system.

The gesture was not well received by the council or lord mayor Robert Doyle.

“What a grandstanding idiot!” Cr Doyle said.

“Why not just return the cheque and we will use the money to encourage young and emerging street artists or to commence a new work in Hosier Lane, such as Adnate's recent work, or to support the Signal youth arts program.”

Last week an image of the torn-up council cheque was posted on arts industry website artsHub, along with a 2000-word essay in which CDH explained his actions.

CDH, who is a professional named Chris, said the council's current grant process disadvantaged street artists, who often have little experience writing successful grant applications.

He said he was able to win his grant by repeating key points of the council's own policies: environmental sustainability, water conservation, climate change, and, he said, Moby Dick.

In his "farce" submission, CDH said small poetry fragments would be written on his wall, where he wanted the text “to flow like a skyscraper”.

CDH said council's grant guidelines advantaged those willing to create art that would be funded. “It sucks the imagination out of the process and just ends up in low quality art,” he said.

The fake application process took about a year and the Council will now allocate the $3300 to another artist.

CDH is no stranger to making statements through his work. In 2012 he was behind an installation which called for “unsolicited” street art to be recognised as art instead of vandalism. The piece, the Trogan Petition ended up being displayed at the National Gallery of Victoria.

He is also responsible for about 100 pieces of street art around Melbourne, including a series of regularly stolen weeping portraits using hydrochromatic ink.

In 2011 he gift wrapped street objects, including a bench and bike racks, as part of Northcote's Northern Exposure Festival. He later panned his own project.

“I made art that would appeal to a selection panel, not art that I believed in. I think this is the worst I've done. I like to reflect on it, as a perpetual embarrassing reminder to be vigilant against compromises,” he said.

The graffiti artist hopes his latest stunt will encourage council to give smaller grants to street artists, with minimal bureaucratic interference. “Most street artists are already creating public works for no cost, so this process of rigid supervision isn't warranted and dampens a lot of the enthusiasm."

In 2014 the council will spend almost $850,000 supporting 67 art projects. The grants are assessed by an independent panel and then endorsed by council.