When the Spanish capital was making its third, ultimately unsuccessful, bid this year to host the Olympic Games, its campaign team ran a video featuring Antonio Banderas and Plácido Domingo under the slogan "Madrid makes sense".

A few months later – and nearly two weeks into a street cleaners' strike that has left rotting mounds of rubbish piling up across the city – that sense of optimism is beginning to look more than a bit misplaced.

The strike by 6,000 rubbish collectors and street cleaners has prompted a round of political finger pointing. For many Madrileños the crisis has become a symbol for the disastrous management of their city.

Madrid's mayor, Ana Botella, has been widely criticised, but she lays the blame on a labour dispute which she says is out of her hands. The street cleaners point the finger at the town hall's austerity-driven plan to cut jobs and wages.

The dispute began on 5 November when the cleaners walked out over plans by the private contractors handling the city's waste collection to sack about one in five workers and slash the remaining employees' wages by 40%.

Since then only a limited bin collection has been carried out, leaving drifts of rubbish strewn through the streets, and the smell of rotting food floating in the air.

The strike has led to surreal scenes on the streets of Madrid. On Thursday one resident, Daniel Campos, was wandering back from the royal palace where, in front of the gates, he and his new wife had had their pictures taken. "We had to change our original plans [for the photos] because we didn't want rubbish in the background of our wedding photos! Our photographers were around earlier today and found a few spots where you couldn't see the rubbish," He added: "This is Madrid. This is what Madrid has become."

While the city's politicians and union leaders have traded accusations, most of the 3.2 million Madrileños have tended to respond stoically.

Over breakfast, in a cafe in the city centre, Jorge Castellanos said that many understood the strike was about defending workers' rights. "Businesses are looking after their space, they're making sure their areas are clean. The tourist areas are being looked after."

But others are beginning to feel the effect of 10 days of rubbish on the streets.

"It's really hurting us. We can't set up our patio because it directly faces a pile of rubbish. We're losing money every day," said Rodrigo Tarazona, who works at a gourmet burger bar in the city in the central neighbourhood of Chueca. "It's been this way for more than a week. We hope this will end soon, but who knows? Customers haven't said anything to us, but I'm sure they think it's terrible."

Following the disappointment over its latest Olympic bid, and disastrous tourist tally, with visitor-numbers to the capital falling by just over 10% in the past year (while the figure rose across the rest of Spain), some are beginning to wonder if Madrid can really count itself in the top tier of European cities.

The question of Madrid's tourism is key. With images of overflowing bins now appearing in newspapers and TV stations across Europe, Madrid is beginning to lose its shine.

Barajas airport, with its extra terminal built at great expense by the architect Richard Rogers, was once the driver of tourism to Madrid but in August fell for the first time behind Barcelona's Prat airport in terms of number of visitors.

Many who have visited the capital in recent days have been shocked by the sights and smells.

Carlotta Wansing, from a small town near Dortmund in Germany, was halfway through a six-week Spanish course in the capital. "It's terrible, I don't understand why Madrid doesn't do something about this. Last week I had a visitor from home and they thought Madrid was so ugly. I kept telling him that it doesn't always look like this," she said.

Plenty of Madrid's inhabitants know who they blame for the city's recent downturn. Botella, who is married to Spain's former conservative prime minister José María Aznar, has been the target for harsh criticism over her handling of the crisis. A group of graffiti artists calling themselves the Ana Botella Crew left out rubbish bags with her face on them.

Despite being ultimately responsible for Madrid's management, Botella initially attempted to distance herself from the strike. Having been criticised for her part in the Olympic bid, in which she became infamous for praising Madrid's central Plaza Mayor, and its "relaxing cups of cafe con leche", doubts have been raised over her ability to run a leading European capital.

For a week Botella barely addressed the demands of the workers, but on Wednesday she declared that she had had enough, and warned the strikers that they had 48 hours to come to a deal, or she would bring in a public-sector company to carry out the limited services needed to keep the city's bins from overflowing.

It did not take long for her opponents to point out the irony of a rightwing mayor threatening to use public-sector workers to cover up for the mess made by the private contractors.

Furthermore, public employees soon made it clear they would not answer Botella's call.

On Thursday Ángel Hernández, the union leader at Tragsa, the state-owned Spanish enterprise which covers environmental protection, said: "We are not going to allow ourselves to be used as strike breakers or scabs."

Tragsa employees, who are themselves negotiating their own round of redundancies, expressed their solidarity with the striking private-sector street cleaners and rubbish collectors, distancing themselves from Botella.

With rubbish continuing to pile up on the streets, and no sign of a breakthrough in negotiations, it might be a while before Madrid makes sense again.

Additional reporting by Ashifa Kassam

Journalistic legwork



It started, perhaps inevitably, with a tweet. Returning home one night at the beginning of the street cleaners' strike in Madrid, your correspondent came across a well eaten leg of jamón, lying next to entrance of the Guardian's HQ.

Was it some kind of coded warning, like when the mafia sends a fish wrapped in newspaper? Or a veiled threat about what might happen if Britain failed to return the disputed territory of Gibraltar?

No, but the cured and chewed leg did provide some small insight into the contents of your average Madrileño's bins, which are now sprawled across the streets.

Briefly I considered moving it, but decided that would make me a strike-breaker. Instead, over the following days, I photographed and tweeted more picturesof the leg.

One day I found it had moved somehow up the road, ending up entangled in a further piece of debris from Madrid's rubbish crisis: a discarded bra. They looked happy there, in the sunshine.

On Twitter, the adventures of the pig's leg and the bra became a curiosity, with some people asking how they were getting on. Buzzfeed picked up on the Twitter stream, running a few of the pictures in a post about the rubbish in Madrid.

Then El País newspaper called, asking if I could write a short article about the strike, which they illustrated it with several pictures of the leg of jamón.

Since then, TV and radio appearances have followed, and the leg of ham and the bra have gained a certain celebrity as symbols of Madrid's rubbish crisis.

Sadly for some, the jamón itself has since disappeared. Its legacy, however, lives on.