The spoof image of the Royal Family, painted on the side of a building in Stoke Newington, east London, was partially covered with black paint.
The building's owner was in tears as she begged workmen to stop. By the time she persuaded them it was almost gone.
Hackney Council said the image was painted over in error.
Property owner Sofie Attrill gave consent for the mural to be painted on the building so it could be photographed for the launch of Blur's 2003 single Crazy Beat.
Since then it has attracted tourists from all over the world and become a local landmark.
We never wanted to make money out of it like many do - but it was a part of our lives. Now it's gone Sofie Attrill, building owner |
Ms Attrill, 50, a property manager who lives in the building, said workmen used rollers to cover it in black paint.
She said: "The workmen were smiling as they did it - they thought it was funny.
"I just burst into tears. But a crowd gathered and we managed to get them to stop before destroying it completely."
Hackney Council needed permission to remove the mural because it was on private property.
But its letters were sent to an address Ms Attrill lived at 25 years ago.
After receiving no response the council served an enforcement notice.
Ms Attrill continued: "I don't care about art or politics - I am just an ordinary girl who liked being cheered up by seeing this on my street.
Damon Albarn's Blur commissioned the piece in 2003 |
"People have always been telling us to sell it or cover it in Perspex, but we only wanted it to be here for the public's enjoyment.
"You can't take a photo if it's behind a thick plastic screen."
She continued: "We never wanted to make money out of it like many do - but it was a part of our lives. Now it's gone.
"People are always doing down Hackney but this was something we could all be proud of."
Hackney Council was initially unrepentant.
Cllr Alan Laing said: "The council's position is not to make a judgement call on whether graffiti is art."
But he later added: "Due to a problem at the land registry unfortunately our letters stating our intention to clean this building didn't reach the owner.
"As soon as we realised this, work stopped. We are now speaking with her about how to resolve the issue."
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