As a subway rattles overhead on a bright sunny day, the smell of aerosol paint permeates the air and graffiti artists spray-paint the side of a building with little fear of police.

Their canvas, the facade of a 200,000-square-foot former factory, has been transformed into a legal "aerosol safe haven" that attracts both local city kids and commercial artists from overseas in their 30s and 40s.

It is supervised by William Green, 41, known by his "tag" or graffiti signature "Nic One". He is part of a movement in New York, the birthplace of modern graffiti, to distinguish graffiti as an art form rather than vandalism and to fight back against anti-graffiti laws.

As skateboarders gathered near the vibrant, multicoloured complex, Green and his partner Jonathan Cohen, 33, alias "Meres", the creator of the space, give teenagers tips to improve their craft.

Cohen wants to establish a permanent graffiti school and gallery. Five years ago he received the landlord's permission to transform the factory's facade into graffiti art using techniques requiring a high level of skill, such as murals based on movie or comic book scenes.

"Here you don't have to look over your shoulder or start running from the cops; you have people like Nic looking out for you," said Diego Garces, 16.

When struggling youths in the 1970s began scribbling messages on subway cars in this once crime-ridden city, few might have suspected it would spawn a worldwide commercial street art and fashion phenomenon.

"Graffiti is a part of New York for good or for bad," said Green, who grew up in the South Bronx selling guns and spray-painting subway cars. He now travels the world holding exhibitions and doing artwork for movies, animation and video games.

"You can't completely stop it," he said.

But New York City Councilman Peter Vallone aims to do just that.

The cost of removing graffiti rose from $300,000 in 1993 to $10 million in 2003. Nationally it costs more than $10 billion a year to remove.

"I've seen how graffiti can lead kids down the wrong road," said Vallone, a former prosecutor and sponsor of the New York law being challenged in court. "It starts them out in a life of crime and then they graduate from there."

Vallone adds if "some innocent people" are dragged into the net then that may be the price to achieve his ultimate goal "to completely rid this city of graffiti."