The former couple get into a heated row while at the all-white themed party, joined by their friends.
It all kicks off when Lucy and Jessica Wright walk past Mario who is standing at the bar. Mario makes a passing comment, saying: "Another one night stand in Marbella".
After hearing the remark, Lucy lets rip at her former flame. "Mario how many girls have you been with while you were with me and once we had broken up? How many?," she repeatedly asked.
"None, none," Mario replied.
Lucy continued: "Yes, I'll admit to you I've cheated on you but after I loved you every day of our relationship. You literally make my skin crawl."
As Daniel Osborne and Ricky Rayment look on, Mario responds, "Likewise." (Watch the video below).
Tensions were building from last week, when Lucy gained a few male admirers after making a grand entrance at a poolside party in a revealing white swimsuit. Meanwhile Mario was entertaining girls on his 'love boat' and also enjoying dates with a mystery brunette, who was later revealed to be former Miss Universe runner-up, Beth.
Viewers also saw Lucy and Daniel get on well at a bar, and were seen leaving together, sparking speculation that there could be a new romance between the pair.
Since their departure from Marbella, Mario told Reveal that he has found single life surprisingly "easier" than he thought it would be after splitting with Lucy for good last month.
TOWIE airs every Wednesday and Sunday at 10pm on ITV2.
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