The ceramic street artist who created one of Rio de Janeiro's most distinctive landmarks was found dead on Thursday on the spectacular mosaic staircase in Lapa that he decorated with brightly coloured tiles and mirrors over more than two decades.

Jorge Selarón, a Chilean artist who transformed the 215 steps of the Convent of Santa Teresa as a "tribute to the Brazilian people", had reportedly suffered depression and was being threatened by a former colleague connected to local drug gangs.

No verdict has been given on the cause of death but friends said they had feared he would kill himself because he felt betrayed.

Photographs showed that passersby have already lit candles near the body as a mark of respect for the much loved artist, who went from obscurity to fame but never left the gritty neighbourhood that is at the heart of the city's Samba culture.

Selarón was primarily a painter in 1990 when he started a small scale renovation of the steep steps that ran outside his house up into the Santa Teresa favela. But the part-time project became a life work.

Sometimes selling his paintings to fund his obsession, he changed the tatty path, tile by tile, fragment by fragment, into a blaze of colour and a globally recognised symbol of Rio.

His steps – often referred to as the Selarón staircase – were designated as a city landmark and appeared in fashion magazines, music videos and films. The artist was declared an honorary citizen of Rio de Janeiro.

As his notoriety increased so did the value of his paintings and, more recently, the pressures on the artist in an area that is also notorious for crime and drug use. The Globo newspaper said a dispute over the proceeds from his art sales had made him suicidal.

In an interview with the daily shortly before his death, Selarón claimed he was threatened by a former employee of his studio.