* Mayor says Knox case sullied Perugia's reputation
* Locals tired, fed up, want court case to end
* Town feeling the pinch of economic crisis
By Deepa Babington
PERUGIA, Italy, Oct 2 As American student Amanda Knox's court appeal ends, exasperated residents of Perugia wish for a return to the days when the Italian town was known for chocolate, art and history rather a sex and drugs scene made notorious by the murder case.
Set against a lush hilly backdrop, Perugia, with its cobbled alleyways, sunny piazzas and palazzos adorned with griffin statues should be basking in the splendour of its medieval and Etruscan heritage.
Instead, four years of media scrutiny of the case, which saw Knox convicted of the murder of her British roommate Meredith Kercher, have exposed a less flattering side of Perugia -- one featuring drug dealers, orgies and drunken foreign students.
"The trial and the media have created this image of Perugia as the 'Ibiza' of Italy which is just absurd," said Marcello Giulietti, 37, a waiter, referring to the Spanish island renowned for its nightclubs and raucous young tourists.
"My own brother, who lives outside Perugia, is now convinced that the town centre is dangerous," he said in one of the town's many cafes with marble counters and gleaming espresso machines.
Knox was sentenced to a 26-year jail term for her role in the murder of Kercher during a drug-fuelled sexual assault in 2007 along with her Italian boyfriend Raffaele Sollecito and a third man, Rudy Guede, a small-time Ivorian drug dealer.
Knox, from Seattle, is appealing her sentence and a verdict is expected on Monday.
Perugini, as the town's residents are called, say they cannot wait for the appeal -- and the accompanying media circus of over 400 reporters, camera crews and satellite trucks that have occupied a piazza near the courthouse -- to wrap up and go home.
"For months we've had a representation of us which is more like a caricature," says Perugia's mayor, Wladimiro Boccali.
"We've been damaged by this negative image that we have to deal with when we sell ourselves as a university town. At first blush, we've been described as a town overwhelmed with drugs and extreme sex games."
Even organizers of a local march for peace -- which celebrated its 50th anniversary last week -- complained the Knox trial had rendered their worthy initiative virtually invisible.
Knox and Kercher --- among thousands of foreign students who flock to Perugia -- shared an apartment in the hilltop town when Kercher, a 21-year-old Leeds University student on the European Union Erasmus exchange program, was killed.
As the trial unfolded before television cameras, so did the town's tawdry party scene -- one where free-spirited students spent their study-abroad semesters staggering drunk out of pubs into piazzas, searching for easy sex and partying till dawn.
The media also discovered a trove of party photos posted by Perugia students on the Internet, prompting the Corriere della Sera daily to dub it Italy's Ibiza, eclipsing the town's earlier claim to fame as the home of a famous chocolate factory.
"It's about time this trial came to an end," said newspaper vendor Ugo Isidori. "It has really hurt Perugia because Perugia is not the city that it's been portrayed as. It's not that city -- it's a much better one."
With anger running high among many in America over Knox's conviction, Seattle also pulled plans in 2009 to name a park after Perugia, prompting Boccali to write a letter saying the trial should not sour relations between the sister cities.
Boccali said the number of students coming to Perugia remained high, but residents offer anecdotal evidence suggesting a growing number are reluctant to send their children here.
Giulietti, the waiter, said his friend's siblings had opted for university in the Tuscan town of Siena over Perugia after the town's supposed drugs and crime problems hit the headlines.
Another Perugia resident said the growing number of "For Rent" signs on apartments in the centre stood testament to the falling interest among students in coming here.
But Perugia's problems are not all linked to the murder.
The town, like so many others across the country, has felt the pinch from an economic crisis that has left Italy mired in sluggish growth and with nearly a third of its youth unemployed.
Boccali says unemployment has risen and consumer spending has fallen in Perugia recent years, even if the town remains a tourist magnet. But he knows the end of the Knox trial will come as a relief to many in his town, including himself.
"We hope it ends soon, whatever the outcome is," he said. "All of us have felt the hit from this media attack against us." (Editing by Sophie Hares)