A 16-year tussle between villagers, prospective developers and environmental concern groups over proposals to develop Shalotung has erupted into open confrontation - and, as a result, the grey, sandy soil that gave the valley its name is very much in evidence.

Bulldozers and earth-moving machines have cut into the long-fallow paddy fields - and deep ponds for rearing catfish have been dug into the soil which has fed 13 generations of Cheungs and Lis.

For the Hakka families who had moved away in search of work are determined to go back to their ancestral lands, sparking yet another round in the long-running saga of the battle for Shalotung.

This has pitted the incensed villagers against the company seeking trying to turn the valley into an upper-class residential area Enraged villagers are also at loggerheads with environmentalists - who they say are trying to stop them farming their land. Some even supect green activists might be behind an attempt to stop the bulldozers by putting sugar into the fuel tanks.

Meanwhile, the Government continues to sit on the sidelines.

Once again, as has happened so often before, the future of Shalotung seems to be in a state of bureaucratic limbo.

The roots of this drama - which would make a good plot for a Cantonese soap opera - go back to 1979.

A developer negotiated with the villagers and purchased rights to use most of the clan land in the valley. It was a complex agreement which involved paying $12 per square foot for agricultural land and $150,000 for each house.

When the development was finished, the villagers could return the $150,000 and get a house, or sell the home to the Government.

Rough estimates of the current value for a three-storey house in the area - given its proximity to an industrial estate and its attractive environment - stand at about $6 million.

Originally, the Shalotung Development Company outlined a grandiose scheme for a golf course and hundreds of low-rise houses.

When these plans became public knowledge, they prompted immediate protests from a range of environmental groups. The scheme was eventually rejected in 1982.

Another proposal was quashed a decade later when the High Court upheld objections from Friends of the Earth about a planned golf course which would have encroached on country park land.

The latest plans are less ambitious. Only a third of village land would be built on. The remainder would feature restored Hakka village houses, nature trails and untouched woodland. Well, that was the intention before May 19 when irate villagers took things into their own hands, hired an earth-moving contractor and began to uproot trees and carve out fishponds.

'We've waited 16 years,' complained Cheung Kwan-tai as he stood guard on the path leading to the village. 'That's long enough.' The development company, however, is adamant the original deals still stands.

Bill Fong, managing director of Shalotung Development, said he sympathised with villagers' frustrations, which he shares.

Although the company bought rights to the land in 1979, various wrangles - largely on environmental grounds - have meant there is still no starting date for building work to begin.

Fong said the much more modest revised proposal for the area is the fourth or fifth. 'I've lost count,' he said.

It calls for 160 homes - heavily subsidised - for the Cheungs and the Lis. The village houses that would have cost about $200,000 to build back in 1982 would now cost at least $1.2 million each.

The commercial basis for the development would be 86 two-storey detached homes and 14 six-storey blocks, with a total of 168 apartments.

The 18-hole, then nine-hole, golf courses have disappeared from the latest plan. Instead they are to remain as large areas of shrubland. All streams would be protected.

'We think this is the perfect solution for everyone,' Fong said. He expected the Government to approve an environmental impact assessment, which in turn would mean automatic approval to widen the road in the area.

But they had reckoned without the villagers. Impatient to return to their fields, the clansmen decided to force the issue.

Last month the villagers - fed up with government indecision and frustrated with the developers - roared in with their bulldozers, putting the entire Shalotung issue back in the spotlight. Friends of the Earth and other groups were swift to write to various Government departments when they became aware villagers planned to bulldoze the disused farmland.

Many environmentalists consider the villagers' move a ploy to force the Government's hand - by pressuring officials into giving permission for the development work to begin.

But it's difficult not to feel some sympathy for the villagers' plight, despite ecological considerations.

At the site of his ancestral home, Roger Li Kwok-keung strode over the bare soil. He worked these fields as a boy, helping his father plant beans, squash, rice and spinach.

When the agricultural economy collapsed in the 1950s, many New Territories men were forced to seek work abroad to support their families. Li, then aged 14, headed for Britain to work in the kitchens of Chinese restaurants.

He later studied accountancy at Aston University, set up his practice in Birmingham and now commutes between England and an office in Tai Po.

A Justice of the Peace in the UK, and active in many public and welfare causes, Li has written to seek help from a man he met several times when he was vice-chairman of the West Midlands One Nation Forum - he has asked Governor Chris Patten to look at the villagers' case.

Hakka determination is legendary and the Cheung and Li clans are incensed. 'We're being sacrificed for the environmentalists,' Li argued. Friends of the Earth and other groups contend dragonflies, butterflies and frogs breeding in the lush undergrowth and abandoned fields will be affected if farming starts again.

'Nonsense,' Li replied. 'Our families lived here in harmony with nature for more than three centuries.' With equal fervour, he rejected claims that water run-off from earth-moving will cause mud and pollution to wash downstream into the Hok Tau reservoir.

'That waterworks was only built in the 1970s when there were still hundreds of people living and farming in Shalotung,' he said. 'Didn't they do an environmental impact study then?' The sorry story is one of conflicting claims, clashing interests and disputed facts.

Key to any development is the widening of the present road in the area. Without it, no large scale building can take place in the valley. John Corrigall, Government land agent for the New Territories, said there had been no gazetting of such work, required under the Roads (Works, Use and Compensation) Ordinance. But Roger Li and the developers are both adamant that the go-ahead was implicit in early talks about development.

Li recalled that when he left Shalotung in 1964, there were about 200 households in the village. Today, there is a permanent population of three elderly Cheungs.

The last of the Lis, an aged grandmother, moved out five years ago, following the rest of her family to the bright lights of Tai Po.

'We want to come home,' Roger Li said. 'This is not a question just of money, but a mission. This is our ancestral place.' He said most villagers left in 1979 because they thought large-scale construction was about to start. Many are overseas, largely in the UK working in restaurants. Others are living in expensive apartments in Tai Po.

'We want to come home,' repeated former farmer Cheung Kwan-wan as he looked over the bulldozed lands which, he vowed, would soon be planted with corn, beans and other crops.

It is all about as messy as the site was last week when rains turned the upturned soil into a muddy morass.

With the sabotaged bulldozer quiet, the only sound in the deserted Li village was the gurgle of a stream and the croak of frogs. Fruit trees - untended for years - have stopped bearing fruit. Vines obscure many of the homes.

'Our rights have been overlooked because of the green issue,' Roger Li insisted.

'My ancestors lived here for centuries without threatening the frogs and butterflies with extinction. If the development programme goes ahead, I'm certain we will once again live in harmony with nature.' What everyone involved wants is a decision about the future of the valley.

But that seems as distant today as it was back in 1979.