* Consortium behind Venice flood barrier accused of bribery
* Latest corruption scandal creates problems for PM Renzi
By Sara Rossi
VENICE, Italy, June 6 (Reuters) - The mayor of Venice, Giorgio Orsoni told a judge on Friday he was innocent of corruption charges which led to his arrest this week in the second major scandal over public works contracts to hit Italy in the past month.
The scandal surrounding a 5 billion euro ($6.82 billion)project to build flood barriers in Venice has highlighted the chronic problem of political corruption in Italy and threatens to become a major distraction for Prime Minister Matteo Renzi as he pushes through an ambitious programme of economic reforms.
The consortium behind the project is accused of constructing an elaborate system of inflated invoices to hide millions of euros in bribes to politicians from most of the main parties to smooth approvals for companies involved.
Coming only weeks after a separate investigation into the Milan Expo 2015, it has revived memories of the "Bribesville" scandals of the 1990s which destroyed Italy's old party system.
Mayor Giorgio Orsoni, who was placed under house arrest on Wednesday and who has been suspended from office, rejected all the accusations against him, his lawyer Daniele Grasso told reporters.
He said his client was "very strained and suffering both in human terms and from the point of view of his office".
Orsoni, attached to Renzi's centre-left Democratic Party (PD), is accused of accepting a total of 560,000 euros in illicit contributions from the consortium to fund his successful election campaign in 2010.
Renzi has promised action to toughen anti-corruption measures but has offered few specifics so far.
The project in question aims to build a series of mobile floodgates to protect the historic canal city of Venice and some 550 square kilometres of nearby lagoons from rising sea levels. ($1 = 0.7332 Euros) (Writing by James Mackenzie; Editing by Gareth Jones)