THIS IS A TALE of intrigue, magic, reincarnation, and rivalry between mysterious religious sects in the high Himalayan lamaseries on the border of Tibet. Although primarily a matter between Tibetan Buddhists, it has the potential of complicating the already tense relationship between Asia's two most populous powers: India and China.

Just over a year ago, the young, teen-aged Urgyen Trinley Dorji, the 17th incarnation of the Gyala Karmapa Lama, made his way through the mountain passes and Chinese border guards out of Tibet and into India. He was not the first high lama to quit Tibet.

His previous incarnation, who died in 1981, had made his way here from Tibet to Sikkim in 1962. The most famous escape of them all was the Dalai Lama's flight in 1959. The Karmapa is considered to be the third most important of Tibet's reincarnations after the Dalai Lama, who resides in Dharamsala in northwest India, and the Panchen Lama, who has disappeared into China's ''protective custody'' and has been replaced by a Chinese stooge.

Urgyen Dorji had had the backing of both the Dalai Lama and the Chinese authorities, perhaps because both saw in him a chance to further their polar-opposite causes. And so it was intensely embarrassing to the Chinese to have the Karmapa defect. At first the Chinese said that he had merely gone for further study to collect some of the belongings of his previous incarnation, who lived here in the vast Rumtek Monastery - a copy of the monastery the 16th Karmapa Lama left behind in Tibet. But now, a year later, it seems clear that the 17th Karmapa is not going back to Tibet anytime soon.

But wait. There is a rival for the title. He is Thaye Dorji, who lives in the nearby Himalayan hill station of Kalimpong. His followers say that Thaye Dorji is not only the true Karmapa, but that the Dalai Lama should have no say in the matter because the Dalai Lama belongs to the Gelugpa or ''Yellow-Hat'' sect, while the Karmapa Lama is by definition a Kagyupa, or ''Red-Hat'' - the result of an ancient Tibetan schism.

According to Ranjit Devraj, who has written on this subject, the Indian government at first favored the rival Thaye Dorji over the ''Chinese Karmapa'' in Tibet. But now that the Chinese Karmapa has come to India there is confusion as to which lama to back.

One thing the Indian government will not do, however, is allow the young Urgyen to live here in the Rumtek Monastery, the world headquarters of his sect, which controls 200 monasteries worldwide, including communities in Woodstock, N.Y., and Los Angeles. Rumtek is considered to be too close to the Tibetan border, and India doesn't want to provoke the Chinese. So he, too, lives at Dharamsala.

Besides vast material wealth, the lama that finally inherits Rumtek inherits the most sacred object of the Kagyupa sect - a black hat, said to be woven from the hair of fairies and to have been presented to the fifth Karmapa by a Chinese emperor 600 years ago. The hat, Kagyupa Buddhists believe, has the magic ability to fly.

Photographs of the 16th Karmapa always show him holding the hat onto his head, lest it escape. Supporters of the rival, Thaye Dorji, hint darkly that the Chinese Karmapa only pretended to escape from Tibet and is here in India to steal the magic hat and return it to China.

I asked the Dalai Lama to enlighten me as to the true Karmapa's identity.

With his trademark giggle, the Dalai Lama said that the young man with him in Dharamsala showed ''great promise'' and that he had not yet met the rival. He said that Tibetan history was full of competing incarnations. His Holiness acknowledged that the current rivalry was unfortunate, but dismissed it all as ''politics, lama politics.''

H.D.S. Greenway's column appears regularly in the Globe.

This story ran on page A15 of the Boston Globe on 1/31/2001.