THIS year, Kowloon Walled City is finally succumbing to the bulldozers. The warren of buildings on the 2.7 hectare site, once home to 33,000 people, will be knocked flat by next May, and by 1996 the area - just a few hundred metres from Kai Tak airport - will be a public park following along the lines of a Qing dynasty Yamencourt building. The 150,000 tonnes of rubble will be used in reclamation. Demolition was delayed by 12 months when a group of more than 500 diehards rejected the Government's compensation package. All told, the Government paid out over $2.7 billion. However, the scheme came under fire from the Director of Audit, Brian Jenney, who said $210 million too much had been paid out to absentee landlords. Mr Jenney said the $34.6 million paid to landlord Chang Kat-kong was $14 million too much. Mr Chang said it was less than the land was worth. Meanwhile, 10 former residents are still camped out in Tung Tau Estate garden, claiming their compensation is not enough. The Walled City site has been controversial since 1898, when it was the only part of Hong Kong which the imperial Chinese government refused to hand over to the British. Throughout the chaos of the 20th century, mainland governments of whatever hue maintained that the site was sovereign Chinese land. It became a lawless area, a favourite base for illegal immigrants and famous for its prostitutes, opium dens and unlicensed dentists. The British and Chinese governments eventually agreed the Walled City's fate in 1987.