Armed with guns and explosives, they clashed over the lion's share of tourist cash from the site, which sits on the border between them.

Tourists were reported to have cowered in the caves in terror as the border rivals threw explosives. The Guangdong Provincial Government has stepped in, acting as a mediator in the dispute.

Amazingly, police have not arrested anyone. Officials said the Public Security Bureau would not be involved as the case was a civilian dispute in which no one was injured.

A confrontation had been brewing long before the resort opened. In the past, Fu Lin villagers of Yunfu county had fields in Yangchun and had to go through the caves to tend to their crops, while a few Yangchun farmers also needed to go through the caves to do their farming on the other side.

It was not until 1958 that the central government re-distributed the lands by exchanging the farms. But Yunfu farmers owned more land in Yangchun and resentment grew.

Tempers began to flare when Ling Xiao Yan was developed into a popular resort by China Travel Service and the Hongkong-based agency Kwan Kin Travel Service in 1989, with entrances on both sides of the border.

Both county governments signed a joint management contract under which Yangchun would manage the resort, but was required to pay 2,400 yuan (about HK$3,200) a month for workers at the Yunfu entrance and box office.

Yunfu officials claimed Yangchun authorities had not paid the sum, and wanted to control the resort.

Last July 24, security guards from the Yangchun management damaged three tourist boats and beat up workers at the Yunfu entrance in order to stop them soliciting business. In retaliation, Yunfu people tried to stop tourists entering through the Yangchun side.

In September, furious Yangchuners armed with clubs and sticks, concreted up the cave's entrance at Yunfu.

A fight ensued and 12 stalls selling food, drinks and souvenirs were damaged, boats destroyed and Yunfu villagers hurt.

The final straw for the Yunfu side came last month when they claimed to have been attacked when they crossed over to see relatives in Yangchun for Lunar New Year.

And the final showdown on January 26 happened when resort workers and villagers at Yunfu tried to re-open their entrance, but were confronted by Yangchun security guards who fired shots in the air. Angry Yunfu mobs, some armed with handguns and rifles, ran through the caves ordering tourists to leave.

The Yunfu villagers then destroyed the stone steps, the stone bridge and power station at the Yangchun entrance using huge hammers, iron rods and explosives.

Mr Zhan Dayang, deputy mayor of Yunfu, told the Sunday Morning Post that reports of damage were exaggerated.

But he was furious at the behaviour of his enemies.

''The root of the matter is their repeated harassment. If they had not provoked our people by damaging boats, burning the box office and hitting people, the January 26 incident would not have occurred,'' he said.

''If our Yunfu people had acted like them and destroyed their property for no reason, they would deserve to be shot.'' He said his community had lost up to several million yuan in revenue since its entrance was blocked.

''The most reasonable resolution is having both parties paying for each other's losses.'' If Yunfu was given the right of co-managing the resort, it would agree to pay commission to Yangchun, he said.

On the other side of the border, a spokesman from He Lang village told another story.

Mr Chen - he declined to be fully named - said Yangchun Mayor, Mr Yuan Wenyao, was planning to sue the Yunfu authorities for damages of up to four million yuan.

Mr Chen said: ''Our mayor told us to calm down and stop making trouble as he is going to file a civil suit suing the culprits.

''We heard that the Yunfu people actually hired gangsters from Guangzhou to carry out explosions. There were several hundred of them and they carried loads of stuff in a truck that we believed to be explosives. We have lots of eyewitnesses here.'' Mr Chen said they were waiting for compensation from Yunfu to restore the resort entrance in Yangchun.

Motorcyclist Mr Huang Jie, who carries sightseers to the spot every day, said the queues of tourist buses had disappeared since the incident. These days, he only takes one or two mainland tourists, who are either unaware of the incident or did not believe the reports.

The deputy chief of state-run Zhaoqing Travel Bureau's general services department, Mr Li Szecheuk, said previously there were five to six groups a day and he speculated the resort to be losing at least $3,000 a day in admission revenue.

Mr Li said the distribution of admission revenue had been a major issue of dispute.

''Our policy is to settle this by 'education and arbitration' and that's why public security has not got involved.

''We hope to re-open it as soon as possible. If an agreement is reached, it won't take much time repairing the damage as long as the scenic features inside the cave are still intact.'' He said police were unable to control the scene that day because the resort was hours away from the nearest big town.

A China Travel Service spokeswoman, Miss Stephanie Jue, said 80 per cent of tourists visiting the resort came from Hongkong.

''Hongkong people have a craving for fresh tourist spots, even if they are difficult to reach by transport.'' She said Ling Xiao Yan's attraction was its stalactite features which offered lookalikes of Chinese legends against a backdrop of colourful lights.

''It's a matter of 90 per cent imagination and 10 per cent emulation.'' But Miss Jue said Ling Xiao Yan's development was still limited by the substandard facilities at Yangchun and Yunfu, including one-star hotels, substandard roads and restaurants.

Hongkong travel agents said they were not hard hit by the incident as they still offered tours to Zhaoqing with attractions such as Seven Star Cave, Pan Long Dong and Mount Dinghu.

Kwan Kin Travel Service spokesman Mr Nordic Chan said: ''We still offer the same package but wish to remind our customers we have changed the spot to somewhere else.

''There is a slight drop of customers as Ling Xiao Yan is a main attraction for the package.''