IT has been praised as not only a great film, but a symbol of artistic freedom. Its director was condemned in his homeland for advocating homosexuality and praising the enemies of communism. It has won two top awards, the Cannes Film Festival's Palme D'Orand a Golden Globe. The film is Farewell to My Concubine and mainland director Chen Kaige's 1993 epic is at the centre of a new controversy, this time over the coveted Oscars. The film was selected by Sir Run Run Shaw to represent Hong Kong at the Oscars for the best foreign language film award. But film industry watchers both in Hong Kong and Hollywood are asking, should it really be called a Hong Kong film? According to the Academy of Motion Picture Arts and Sciences' own guidelines for selection consideration, it should not. A spokesman for the Oscars body, director of communications John Pavlik, said the academy's executive committee which selects foreign language films ''tries to bend over backwards to include good films''. But has it bent so far that it has broken its own rules? Not so, says Mr Pavlik. The selection committee sent out a three-point guideline list to all countries wishing to nominate a movie for the foreign language film Oscar. Each country can nominate just one film, 35 have this year been submitted for consideration for the final five. The guidelines are: The submitting country must be present in at least three of these categories: producer(s) director(s) writer(s). There is a note added to the official entry form which states that only those with full producer credit are entitled to represent the picture. If the contribution is essentially financial, ''it will not be regarded as satisfying the requirement''. The financing for the film was from Hong Kong, but under these criteria, only one of the writers qualifies Hong Kong for consideration. Secondly, the submitting country must be represented in at least three of the following categories: art director, cinematographer, costume designer, editor, sound mixer, music composer. Only the cinematographer and music composer on Farewell to My Concubine are from Hong Kong. Lastly, talent from the submitting country should constitute a significant element of the cast. While Hong Kong's Lesley Cheung stars in the film, Farewell to My Concubine has been, until now, regarded as a mainland film because the production team, director, most of the leading roles and the creative team is from China. In fact, Farewell to My Concubine did not qualify under the even less stringent Hong Kong Film Awards rules for a nomination for the films of 1993 as a Hong Kong film. But the guidelines are meant to be just that, said Mr Pavlik, they are not ''hard andfast specific rules''. China's nomination for the foreign film award is called Country Teachers, directed by He Qun. Within Hong Kong's film industry, however, opinion was not on the side of the academy's foreign language film selection committee. South China Morning Post film critic, Paul Fonoroff, is one industry watcher who is not happy with Farewell to My Concubine's nomination as a Hong Kong film. ''The film's quality is unquestionably equal to that of past winners, but the question can be legitimately raised on whether or not Farewell to My Concubine is eligible to represent Hong Kong. ''It seems as if the academy has given China two nominations - whatever film is officially put forward by the Chinese Government and whichever film the academy deems should have been China's selection. But Hong Kong has its own film industry and it is a shame the academy only regards Hong Kong as a convenient territory to give China another chance for an Oscar,'' Fonoroff said. ''Rather than breaking the rules and creating a double standard which applies only to China, they should change the rules.''