THIS time last year Richard Pontzious was in danger of losing his famous cool. His problem these days is keeping his feet on the ground. ''Suppose you had a dream of starting an Asian Youth Orchestra, but you didn't have any money and nobody knew what the hell you were talking about,'' said the tall American settling into legend-making mode the other day. ''Then suddenly, you not only had such an orchestra, but one of such renown, that within four years, it was being invited to play in the best concert halls of Europe.'' This is not a favourite fantasy of the founder and executive director of the AYO. On August 8 - or if you prefer, on the fantastically auspicious eighth day of the eighth month at 8pm - the grand adventure will start when 99 immaculately groomed young musicians take their places at the Cultural Centre Concert Hall. Under conductor Eri Klas, currently music director of the Aarhus Symphony Orchestra, Denmark, they will present a challenging programme including the Hongkong premiere of Alfred Schnittke's Concerto for Violin, Amplified Piano and Orchestra which will feature acclaimed Latvian-born violinist Gidon Kremer as soloist. As the members of the AYO take their final bows, they will have to struggle to remember the Pontzious points on professional behaviour, because there's going to be an awful temptation to leap around yelling: ''Aye-ya, off to Europe tomorrow!'' By the end of August, they will have played in some of the world's most historic concert halls including the Konzerthaus in Vienna, the Concertgebouw in Amsterdam, the Kulturpalast in Dresden and the Schauspielhaus in Berlin, and appeared by special invitation at the prestigious Schleswig-Holstein Festival - an almost unbelievable coup for any orchestra, let alone one made up of 15-25 year-olds from across Asia. ''They're beside themselves with excitement,'' said Pontzious, looking more than a little overwhelmed himself. The AYO's spectacular lineup for its first tour of Europe is not the only reason for his joy. After three years of bitter frustration, Richard Pontzious has finally made the breakthrough that seemed impossible 12 months ago. ''For the first time, we have musicians from China in the orchestra. There are just two - a double bass player and a violinist who recently graduated from the Shanghai Conservatory - but it's a start and I think we'll see a stronger representation next year. ''Step by step is my attitude. Think of how many years the Chinese didn't participate in the Olympic Games and look at them now.'' The Shanghai Conservatory is special to Pontzious. It was there, starting in 1983, that the native San Franciscan taught conducting, coached chamber ensembles and prepared high-flyers for international competitions. Year after year he was invited back. And when his dream of an Asian Youth Orchestra finally became reality, it seemed entirely appropriate to hold the pre-tour summer camp at the Shanghai campus. The announcement was made in April, 1989 and everything seemed set for a triumphant debut four months later. The great Sir Yehudi Menuhin had agreed to be the AYO's music director and conductor, 37 of China's finest young talents were in the orchestra and concerts had been scheduled for Beijing and Shanghai. Then the bloodbath of Tiananmen Square happened and Richard Pontzious's brainchild lay shattered with no hope of immediate recovery. The inaugural tour did happen the following year, but the summer camp was in Kumamoto, Japan, and there were no players from China. It was the same in 1991. And in 1992 when Richard Pontzious divulged China's official explanation for cold-shouldering theAYO: every single music student in the People's Republic was too busy to audition. The real problem, believed Pontzious, began just after Tiananmen Square when the Chinese stipulated that unless the orchestra played in Beijing, it would be no go. With 103 young people in his care and martial law in force in the Chinese capital, the executive director had sensibly declined and so began the stalemate. Pontzious is glad the thaw has set in, but his real delight is over the European tour - and the healthy financial state of the AYO whose headquarters are in Wan Chai. ''Our budget has jumped from $9 million to $15 million and all without Government support except, perhaps, if you count the Urban Council's subsidy scheme which we are fortunate enough to enjoy. ''Otherwise we manage entirely through private funding. We've kept all our major sponsors over the years and we make sure they know how their money is being spent. Scholarships are particularly important. They cover all the kids' costs and they all have one.'' Leading the benefactors this year is Cathay Pacific, exclusive sponsor of the Hongkong concert which will launch the European tour. By then, the orchestra will have performed in Singapore - also the venue for this year's summer camp - Bangkok, Tokyo and Osaka, and together with faculty members, become the vibrant community of musicians Richard Pontzious envisaged all those years ago. More than 1,100 students from 10 countries auditioned for the AYO this year and once again, as if by magic, the gender breakdown was about 50/50. ''What's interesting about that,'' Pontzious observes, ''is that most of the girls come from Japan, Korea and Taiwan, while most of the boys are from Hongkong, Vietnam, Malaysia and Singapore.'' Even more interesting is a bit of advance news. Next year, for the first time, the AYO's rehearsal camp will be in Hongkong, reveals the man who has made it his mission to take Asia's sound of music to the world.