For Australasia it was exotic: In 1999 the small New Zealand Karma Choeling Buddhist settlement at Kaukapakapa, secluded amidst the sheep, punga, tuis, toetoe and rich dairylands north of Auckland, had thrown up an incarnation - Venerable Karma Kunsang Thubten Dorje Lungtok Nyime Pal Sang Po Pong Rinpoche, to give him his full name - of Pong Re Sung Rap Tulku Rinpoche, a somewhat obscure lama of the 1950s from eastern Tibet.

Rinpoche had an obsequious TV documentary made on him in New Zealand, was received by the Maori queen, Dame Ataairangi Kahu, at Turangawaewae Marae and congratulated in parliament on his enthronement. The media went into a brief lather, which polarized into fawning reverence for an ancient and seemingly adamantine tradition, to outrage that a young kid could be taken out of his innocent infant milieu and moved to Sherab Ling monastery in northern India. Rinpoche was to be educated in the precepts of a tradition - albeit the baroque Tibetan version of it - 2500 years old and have enlightenment, like fame, thrust upon him.

There was little or no commentary in between these polarities and a large and potentially inquisitive audience - just about to piggyback on a burgeoning Australasian interest in Buddhism - was left clawing at fresh air as the orchestrated and media-savvy Kaukapakapa circus struck camp and moved out of town for a publicity tour of Australia. But what had happened since?

Searing heat hitting 40 degrees in Delhi in June sharpened the incentive for the journey to the cooler north Indian state of Himachal Pradesh to find Sherab Ling and the child lama. Through the steamy green belt of the Punjab, the corruption of the Indian police looking for bribes for minor highway infractions, the filth and flies of the roadside eating dhabas buried under blaring PEPSI signs, and the traffic snarls, the driver's accelerator pedal quivered under the imperative of "escape" to the Arcadian promise of Dharamsala and McLeod Ganj - or "Little Tibet" as the Tibetan government-in-exile headquarters is called - and the immediate foothills harbouring the monastery and the young rinpoche.

The question that jostled in the mind with the distractions of erratic road surfaces, the bump and grind, and the hair-pin bends of the climb into the hills was how had this Tibetan tradition, for centuries in splendid isolation, accommodated its exile - and, by extension, its young incarnate lama from the antipodes - and come to terms with a world increasingly materialistic and secular.

Tibet has always been elusive and this is part of the reason the "Roof of the World" has seemed bewitched - shimmering, but out of reach - and aloof from the encroaching technology and secularism that has sounded the death knell for alchemy, mystery and magic. To travel to the Magic Kingdom for a dense but uneasy immersion used to require great subterfuge - and lashings of yak butter and charcoal smeared on the face and clothes - to circumvent wary local officials and bandits. In short, foreigners, like tourism, trade, sport and science, were banned.

In the West the image of Tibet was burnished by James Hilton's 1933 novel Lost Horizon and Frank Capra's 1937 film based on a mythical Shangri-La, where people, like Peter Pan, lived for centuries but never grew old. More darkly, a number of German Nazis were spawning theories about Tibet - pure, white and alpine - being the fatherland of the Aryan race. In the fifties Jack Kerouac and Allen Ginsberg saw Buddhism as a career-choice alternative to capitalist materialism for the backpacker Dharma Bums.

Times have changed: All one has to do to access Tibetan Buddhism now is trip on down to the local multiplex for Kundun, Seven Years in Tibet or Little Buddha, buy Richard Gere's coffee table book of photos or enlist in the Free Tibet movement.

Ironically, it was the Chinese invasion of Tibet and the flight of the Dalai Lama to India in 1959 after a CIA funded revolt imploded, and the subsequent Tibetan diaspora, that brought the dharma West and, like the tender preservation of an antique, it has found nurture among the affluent and well-educated - in a comfortable embrace of the chic and the virtuous - spiritually ravenous after centuries of an emasculated Judeo-Christian ethic.

Alienated by China's genocide in Tibet and their continued flagrant disregard for human rights, many in the West and particularly in the United States see themselves as the custodians and archivists of the world's most compelling spiritual tradition.

And in the Oprah Age the impetus of Buddhism, fuelled by an insatiable Western culture of therapy, into the mainstream of Western life has spawned some bizarre versions of reincarnation. Traditionally, spiritual leaders who had gifted teaching skills purportedly chose to be reborn to allow sentient beings to become enlightened.

But the recognition of the Catherine Burroughs, a hairdresser dubbed the "Buddha of Brooklyn", as the reincarnation of 17th century saint Jetsunma Ahkon Lama, the elevation of Hollywood star Steven Seagal by Penor Rinpoche, the head of the Nyingma school of Tibetan Buddhism, in front of 1500 monks, as the reincarnate Chungdrag Dorje, and the isolation in Eastern Tibet of Bill Clinton as the revered tulku, Gumyat Shepa, has verged on the risible: a hapless move for Buddhism but a fillip for satire. It seems some Tibetans are just as capable of being star-fuckers as a rock groupie.

When the Dalai Lama in a prescient warning in 1990 said he tried "to make a distinction between the essence of Buddhism and the cultural part of Tibetan Buddhism … the essential part would be more or less the same everywhere, while the cultural part may change from country to country … so I think it may not succeed if a Westerner tries to adopt Tibetan Buddhism in its complete form," it seems unlikely he had Seagal, the "Buddha of Brooklyn" or Bill Clinton in mind.

A patina of mystery has always attached itself to the subject of reincarnation in Tibet. But the reality of this inexact science is, as Buddhist scholar Matthew Kapstein says, more pedestrian: "It is naïve to consider the reincarnation system to be purely religious. It has always had powerful political and economic dimensions." The arcane dimension of reincarnation is embodied, and epitomized, by the Nechung Oracle, the state seer, who goes into a trance that allows signs to emerge. The reality is that, as is becoming increasingly evident, reincarnation is a political game that is getting out of hand.

Coupled with this co-modification is another backdrop the reincarnated Kiwi rinpoche from Kaukapakapa will have to grapple with. Of the four lineages of Tibetan Buddhism - Nyingma, Sakya, Gelugpa and Kagyu - rinpoche belongs to the latter school and he will increasingly find himself embroiled in a toxic internecine battle over the leadership - embodied in the ancient title of the Karmapa - of the Karma Kagyu sect.

Like the two dueling Panchen lamas - one sponsored by China, the other by the Dalai Lama - the Kagyu sect now has two Karmapas claiming to be the true incarnation of the 16th Gyalwa Karmapa who died in 1982.

Within Tibetan Buddhism the controversy has shown all the signs of causing a serious schism within the Karma Kagyu lineage; a schism that is being spoken of as having serious foreign policy implications for India, Tibet, China and the Tibetan government-in-exile in Dharamsala.

In one corner is Urgyen Trinley Dorje who, on the evidence of the propaganda war being waged in Dharamsala, McLeod Ganj, and in Majnu Ka Tilla, the Tibetan colony outside Delhi, is in the ascendancy. He also seems to have an iron grip on the devotees at Kaukapakapa who have declared the monastery the official seat of Urgyen Trinley in New Zealand. The disputed karmapa has endorsed the Kiwi rinpoche.

But who is teenage Urgyen Trinley? Some see him as "spectacular", "poetic" and having "great potential" while others more jaundiced perceive him as sacrilegious, indulged, rich, of a low IQ and having a propensity to temper tantrums and spitting. But aside from this dichotomy, is he really the 17th Karmapa, ostensibly the No. 3 spiritual leader after the Panchen and Dalai Lama? Disturbing allegations of fraud and murky Byzantine political machinations pirouette around this recognition.

Urgyen Trinley was plucked from a nomad's tent at the age of seven and installed in Tsurpu Monastery - the headquarters of the Kagyu sect in Tibet - with the blessing of the Chinese and the elusive Tai Situ Rinpoche, one of four regents responsible for the appointment of the new Karmapa.

Then he "escaped" - controversy rages over whether this was an "escape" or an exit carefully engineered by Beijing - to northern India and now sits in a "gilded cage" outside Dharamsala under the nervous eye of Indian foreign policy bureaucrats.

While Tai Situ Rinpoche endeavours to conduct this increasingly discordant symphony, a rival regent, the powerful Sharmapa, a nephew of the deceased 16th Karmapa, pushes the case of his own Karmapa, Thaye Dorje, who was installed as a rival at New Delhi's Karmapa International Buddhist Institute in 1994 where a nasty melee - with the Sherab Ling fraternity in the vanguard - between the two factions ended in brawls, clouds of tear gas and arrests.

The controversy has highlighted the growing involvement of China in the appointment of top Tibetan lamas: If the Chinese have a hand in the appointment of the Dalai [becoming an old man: he is 67], Panchen [with a Chinese appointed candidate and a Dalai Lama endorsed lama] and the Kagyu lamas the water-tight first rule of imperialism - divide and rule - will have sway. Urgyen Trinley has already visited to the Great Hall of the People and Tianaman Square.

At Sherab Ling the monastery is festooned with large photos, side by side, of Urgyen Trinley, Tai Situ Rinpoche and the Dalai Lama, intimating an inchoate momentum to install Urgyen Trinley as the next Dalai Lama. This despite the centuries old bad feeling between the Kagyu and Gelugpa sects that saw the Dalai Lama's brother - a millionaire some accuse of laundering Tibetan artifacts through Hong Kong - abortively attempt, in a nasty feud, to merge the four lineages in 1961.

So, what is going on here? It looks likely that Tai Situ Rinpoche is playing a sophisticated and clever power game that could significantly change the alliances of China, the Tibetan government-in-exile, and India who remain deeply suspicious of Chinese involvement.

Tai Situ Rinpoche, another to give his ringing endorsement to the Kiwi rinpoche - "I am certain this boy … is the incarnation of the Eastern Pong Re Tulku" - remains a shifty figure and has been dubbed in Hong Kong as "the Last Emperor" because of his penchant for palatial hotel suites. He has been accused of close links with influential bureaucrats in the Chinese administration, intimidation, violence, forgery and quaintly "hoodwinking" and was banned from 1994-98 from entering India for "criminal" activities.

He was also banned from Sikkim - its northern border abuts China and to this day it appears on no Chinese map of the world as Indian territory - where a riot erupted at Rumtek Monastery, the Indian headquarters of the Kagyu lineage, between the two competing Karmapa factions.

Visit Tai Situ Rinpoche at Sherab Ling and you quickly realize that behind the trappings of the fan that constantly flutters, the beautiful room lined with 240 glass-cased small Buddhas, the ornately stitched silk robes, the deference of attendants and the cell-phone is a sophisticated intelligence equally at home discussing Salman Rushdie's peregrinations, the refinements of Buddhist theology or the idiosyncrasies of Chinese pronunciation - his mimicry is a subtle put-down - of English.

Arriving in Sherab Ling in 1975 the 48-year-old regent had 50,000 rupees [NZ$2,500], "six old monks" and an assignment from the former Karmapa to build a monastery that now houses 450 monks and novices, one of whom is Venerable Pong Re Tulku Rinpoche. The result is an impressive edifice nestled in the foothills of the Himalayas, dominating a landscape where leopards roam free and Americans, over-eager to dive uninitiated into tantric ritual, run amok. There is an uneasy feeling that a part of Tai Situ Rinpoche's ego broods over Sherab Ling.

His physical monument behind him Tai Situ talks of doing "nothing" but it's soon evident the intricacies of Tibetan politics, and his personal agendas, will preclude that. The search for the new Karmapa Tai Situ says "was conducted according to the previous Karmapa's instructions" and adamantly that "there is no such thing as proving, it is proved already. The Karmapa is the Karmapa, Buddha is Buddha, the Dalai Lama is the Dalai Lama. We are believers. That's it." In this case the "Karmapa's instructions" on succession reverberate around a letter "miraculously" found in a talisman round the neck of Tai Situ.

But the veracity of this letter is in doubt with the opposition Karmapa's followers. Accelerant has been hurled at this bitter conflagration by the refusal of Tai Situ Rinpoche to allow the letter - widely touted as a forgery complete with smudged signature - to be examined forensically. The letter has real potency in terms of Tai Situ's connection with the Chinese: They issued an internal directive allowing the monks at Tsurphu the - Kagyus chief Tibetan monastery - to elect a new Karmapa on the basis of the 16th Karmapa's will. Since only Tai Situ had the prediction letter the likelihood of collusion with the Chinese is real.

What has given Tai Situ Rinpoche the propaganda high ground is the controversial endorsement of Urgyen Trinley over Thaye Dorge by the Dalai Lama. It seems that the Dalai Lama may have been duped into believing that the regents were all in agreement. The race is now on to convince the Buddhist world that one or the other of the two Karmapas is the real thing. After all, there can't be two incarnations of the 16th Karmapa. Neither faction, however, looks like retreating.

Indian government officials are increasingly perturbed about law and order problems not to mention smoldering - and looming - difficulties with the bugbear of Indian foreign policy, China. The stakes have been raised even further with the increasing pressure from the Chinese to have Urgyen Trinley installed in Rumtek Monastery in Sikkim where they know their Karmapa will be able to take possession of the mythical Black Hat - symbol of the leadership of the Kagyu lineage - and galvanise Sikkim's largely Buddhist population behind a Chinese national. This is a script the nervous foreign policy babus in South Delhi - who regard the Sharmapa as the paramount regent - are anxious to avoid.

Urgyen Trinley was meant to arrive at Sherab Ling at the end of June for his birthday. Everyone was convinced of this and preparations were well advanced: The last few hundred metres of the road to the monastery was tar-sealed by an abject crew of dalits [untouchables] living in grim circumstances on the periphery of the monastery; heavy statues were moved; painters painted precariously from dodgy bamboo scaffolding; cleaners cleaned; and young monks - a sort of child task force sans the Kiwi rinpoche who rarely mixes with the hoi polloi - plucked pine needles into huge piles for mattresses.

But as the days passed it became evident the Tai Situ-sponsored Karmapa was not going to arrive and certainty dribbled into hope. Even Tai Situ equivocated about the arrival as the days passed and would only commit to optimism as he spoke darkly of the problems and nervousness of Indian bureaucracy.

What is really at stake in the dispute over the Karmapas is not the intricacies of Kagyu doctrine but a play for power and money. The Kagyu sect's leaders have a grip on large business investments, donations revenue and a charitable trust whose worth is put at well over $2 billion. Meanwhile amidst these power games the Tibetans-in-exile eke out a precarious existence in handicraft businesses and small plots of land battling poor sanitation, clean water, inadequate housing and poor health facilities. The unemployment rate runs at 18.5 per cent, a pool of disenchanted the Dalai Lama's death may unleash.

Hovering uneasily over this unsatisfactory and overheated imbroglio - most of it antithetical to the Buddhist dharma - is the 1989 Nobel Prize winning Dalai Lama, with his message of inner disarmament, bestriding the world stage with a mana and idolisation like Mahatma Gandhi or Nelson Mandela. But this incandescence has not stopped the Sikkim Karmapa pulling off a stiff-arm in the Hindustan Times: "I won't say the Dalai Lama himself takes money, but he has always helped rich and influential people. The Dalai Lama did not recognize me as Karmapa because I hailed from a very poor family." What the Dalai Lama is increasingly inheriting - fiddling, as he has, with contradictory notions of a future democratic Tibet - is a feudal lamadom immersed in superstition, squalid power and money intrigues, and buffeted by the great powers in another version of the 19th century Great Game.

Some are predicting that when the Dalai Lama dies chaos will ensue with pent-up frustrations in the exile community - and within Tibet - only held in check by the Dalai Lama's moderating influence and his adherence to non-violence. To avoid this China increasingly is looking to shed - at least on the surface - its atheistic philosophy to become a player in the reincarnation game. In a classic case of divide and rule these schisms within Buddhism are viewed as a real chance to destroy the exile communities' momentum in both India and the West.

In short the Karma Kagyu lineage has been paralysed. What could follow is the spectre of a lobotomy. With two Panchen Lamas and two Karmapas - and all the non-Buddhist venom this has spawned - the prospect of two Dalai Lamas has serious temporal and spiritual implications. Intriguingly, the Dalai Lama has announced his incarnation will be born outside Tibet, something those inside the country will possibly reject. Ominously, the Chinese government has said his incarnation will be born in Tibet. This Chinese insistence says Tibetan Youth Congress vice-president Karma Yeshi "is all part of strategy to create confusion in the community".

It is onto this torn canvas that the Kiwi rinpoche will find himself painted. At Sherab Ling the spotlessly laundered Kaukapakapa rinpoche is accorded a status unlike the rest of the boys in the monastery, a division he seems happy to flaunt, buttressed as he is by Gameboys, stuffed Kiwis, dinosaurs, DVD video players, mini stereos and other toys from the West. Rinpoche has a venerable old teacher in constant attendance at the apartment, even sleeping in the same bedroom. The constant recitation of Tibetan texts, certainly at this point, remains the bread and butter of his education.

Columnist Peter Calder in an October 1999 article in The New Zealand Herald writes of rinpoche, prior to his exile, raising a golf umbrella at Kaukapakapa to protect his shaven head from the hot sun. "I lean to help," wrote Calder, "and as it clicks open he flings it over his shoulder, spiking me in the forehead, and strides off robes billowing. Lama Samten, following close behind, smiles. 'He's very bossy,' he says. 'He has to have a strong character.'"

The development of this "strong character" Karma Choeling's website puts at over $40,000 plus per year and it invites contributions for the various pujas, ceremonies, offerings, butter, incense, texts, ceremonial robes, visas and other props.

There is something spoiled, arrogant and dismissive about rinpoche - though time and training may erase this - that is rooted in a hierarchical system where some are more equal than others. At Sherab Ling the lamas, noticing this behaviour, shuffle their feet and remain mute.

Tai Situ Rinpoche likens Sherab Ling to a Catholic boarding school but the reality for those not accorded the status of rinpoche is more Dickensian: bhikkhus sit next to the kids and whack them if their attention to chanting the texts is flagging; youngsters - shaving scars like spots of rust on their heads - traipse along at meal times carrying their tin plates to be filled with a rebarbative gruel eaten at long wooden tables; and lively hordes of boys sweep the pavements, to little effect, with palm branches.

"As above, so below" runs an esoteric maxim and back down on the farm at Kaukapakapa there are septic murmurings that the Venerable Kartung Pongtul Rinpoche's mother was already pregnant when she came to New Zealand to live off welfare, that the real father is in dispute and that the media assault in Australia and New Zealand was manipulated with terrestrial shrewdness. Others talk of Lama Shedrup, the official father of rinpoche and well known on the Australian dharma circuit, as a connoisseur of good restaurants, a sanitising interpreter of pre-Chinese theocratic Tibet as a land of peace and harmony, a diverter of funds - meant for monastic use - into the family coffers, and a man who weaves a deft web to lure followers while his eye remains firmly fixed on the cheque book.

Oddly, there are two other incarnate lamas from the Kagyu lineage in New Zealand - one Maori, the other the son of R. D. Laing - but they have received little attention. The Kaukapakapa lamas - in a revealing xenophobic twist symptomatic of the clannishness of Tibetan Buddhism - considered a Tibetan incarnate had much more weight on the Australasian circuit. Indications are the Kaukapakapa Karma Choeling Buddhist Monastery - slavish in its support of Urgyen Trinley and Tai Situ Rinpoche in the Karmapa saga - is taking on all the hallmarks of a faith-based cult.

At Sherab Ling one day I watched an incident that transcended the politics of the lineage, as rinpoche's teacher, in the grip of "ahimsa" [non-violence], spent minutes extracting a tiny insect with a sliver of cardboard from the water cooler. It was a prompt that whatever the mediaeval politics of incarnation the real residue - a tincture of a tincture - is the stainless 2500 year old dharma. Sadly it competed uneasily with a comment from a Western monk: "If you want to uncover the dirt on the dharma, get a bulldozer."