The following, from Wikipedia entry on Ruardean, tells the story, dated to late C19, with variants ~~ fines but no imprisonment, no Italian, but two Frenchmen & two bears. All I can say is that the story as I have told it above, which I had locally, in Soudley near Cinderford, mentioned in wiki below as the place the culprits actually came from {and where my wife had been at school}, and the son of one of whom I knew, was of an Italian, one bear, and the culprits imprisoned. FWIW, my wife Valerie began her journalistic career as court reporter at Littledean, mentioned below as the court which had sentenced the offenders in the 'bear' incident, for the Dean Forest Mercury
A notable event in the town's history occurred on 26 April, 1889. Four Frenchmen and their two bears were making their way to Ruardean, having performed in Cinderford. They were attacked by an angry mob, enraged by claims that the bears had killed a child and injured a woman. The bears were killed and the Frenchmen badly beaten. It soon became clear that the bears had not attacked anyone. Police proceedings followed and a week later 13 colliers and labourers appeared before magistrates at Littledean, charged with ill-treating and killing the bears and assaulting the Frenchmen. All but two were found guilty on one or more charges, with another convicted a week later. A total of £85 was paid in fines - a huge sum in those days. A subscription was also launched which generously compensated the Frenchmen. The term 'Who killed the bears?' existed for many years as an insult, directed particularly towards the people of Ruardean, despite the fact that all those convicted were from Cinderford, and caused a long-term feud between the inhabitants of the two towns.
Take your choice between the two versions. Nothing like folklore!