Police boarded the Sangermani yacht after a dock worker managed to climb aboard and grab the keys from the ignition.
He then called the local Carabinieri paramilitary police who placed her under arrest – with Italian media saying she has been living a "double life".
Police have charged Watson, from Canterbury, with theft and he alleged she has linked to a series of other thefts since arriving in Italy in February.
Italian police described her as “tall, blonde and refined” and she is due to appear in court in Genoa next month.
She is an award-winning designer and painter and was also creative director of a fashion brand in Belfast.
The keys had been left on the vessel which is owned by a boat rental company.
After she tried to leave the harbour, a suspicious dock worker spotted her and managed to get on board.
By looking through her Facebook and Instagram accounts we found that she had done navigation courses in the past and knew how to handle a boat.
"She nearly made it out of the harbour.”
The Carabinieri found that she had been reported to police in various parts of the country for leaving hotels and restaurants without paying.
La Rivieria, an Italian newspaper, commented: "The double life of Larissa Watson seems to have come straight out of a film.
"In Britain she’s an esteemed artist, in Italy a thief who’s been under scrutiny by the police for some time.”
The newspaper dubbed her “the Portofino pirate”.
Her social media feeds have been filled with pictures of her enjoying life in Italy.
She has posted pictures taken in Rome, Sicily, Emilia-Romagna and along the Riviera.
In March she posted she had been thrown out of an official Jamie Oliver launch party in Bologna by an “officious little girl”.
And she also cryptically posted bemoaning “happy times when I had decent clothes to wear, a great car to drive, a home and a clean, comfortable bed every night”.
Mrs Watson has four children and reportedly told police she didn’t want them contacted when she was arrested.
Police said if she fails to turn up to court n July an international warrant will be issued for her arrest.
She has exhibited her art and textile design in Britain, the United States, Europe and Japan.
Click banner to register and browse
community posts by members
Source : Daily Star UK