BOSTON -- In an asphalt courtyard at the Old Colony public housing project in South Boston, three young white men sipped beer from cans and surveyed the maze of low-rise brick apartment buildings.

"There's going to be trouble," said Fred Casey, 20, a lifelong project resident who sees little merit in Mayor Raymond Flynn's pledge to open the 870-unit project to blacks for the first time in more than 10 years.

Around the corner, 22-year-old Ann Marie Good sat in an open window of a first-floor apartment and pointed toward a strip of red paint across the top of a nearby building. "It used to say 'niggers go home,' " she said. "If they move in, it's going to be war."

And on East 8th Street, where the project meets a dense neighborhood of wooden three-deckers, Denise Foster, 17, voiced a common fear among white project residents as they anticipate having black neighbors. "They're going to try and take over our territory," she said.

This is an isolated, turf-conscious community, where memories of violent resistence to school busing in the early '70s are fresh. Apprehension has been growing here since October, when federal officials accused the Boston Housing Authority (BHA) of discriminating against minorities seeking shelter in the city's public housing system, the nation's fourth largest.

Poor whites have denounced Flynn's subsequent decision to stop maintaining separate projects for whites and blacks, in terms that recall the days after court-ordered school desegregation, when police regularly lined the routes to South Boston High School and black students were pelted with stones.

For Flynn, a South Boston resident who once helped lead the antibusing crusade, the move to desegregate public housing has provoked enmity from his neighbors and poses what may be the most serious test of his tenure.

"I happen to think it may be the most significant issue we deal with in the City of Boston over the next 40 years," he said recently. In the first year of his second term, he is widely perceived to be healing the city's deep racial divisions.

The first danger signals appeared in his November reelection bid when Flynn carried every district except his own. His neighbors preferred challenger Joseph Tierney by about 500 votes out of 9,500 cast there.

And earlier this month, several hundred residents meeting in a South Boston church hall jeered and hooted Flynn before television cameras as he tried to explain his fair-housing strategy. "That was the toughest meeting I've ever gone to in my life," Flynn said. "It's not easy going into your own community and taking that kind of criticism."

In several neighborhood gatherings, Flynn has assured residents that no white public housing tenants will be moved out to make way for black people -- as has happened in East Texas, where whites and blacks traded apartments under a federal court order. If Boston acts now, Flynn has said, integration in South Boston's housing projects will occur gradually, as blacks move into vacant units.

But even that plan is anathema to many in South Boston, in part because a tenant assignment system with a single chronological waiting list will force poor whites waiting for public housing to move into predominantly black projects.

"Is that a comfortable environment for a young mother?" asked James Kelly, the district city councilman from South Boston. "I can't ask people to do that."

Housing officials here do not expect black families to begin moving into two predominantly white South Boston developments until spring.

Flynn says he shares blame for the violence precipitated by the the 1974 school federal desegregation order because he failed to tell South Boston voters what most local politicians knew: that they would not be able to stop black students from attending South Boston High School.

"There were no major meetings where political leaders got up to tell people exactly what they didn't want to hear," he recalled. "Maybe I was the one in 1973 who should have been up there saying that."

Today, Flynn is telling South Boston residents what many of them do not want to hear: that the only way to prevent a federal judge from taking over the authority is to allow blacks into South Boston.

Early last fall, the federal Office of Fair Housing and Equal Opportunity told city officials that preliminary results of a two-year study showed that the BHA maintained segregated housing projects in violation of the Civil Rights Act.

The authority's 60,000 tenants make up about 10 percent of Boston's population. Three-quarters of its 18,000 apartments are maintained with federal funds, the rest with state money. The authority uses federal and state dollars to subsidize its tenants' rents in 8,000 private apartments.

In a six-page letter to Flynn, Robert Laplante, New England director of the Office of Fair Housing, cited five developments in different sections of the city where minorities were underrepresented. But he focused on the Old Colony and Mary Ellen McCormack projects in South Boston, where a few Asian, American Indian and Hispanic families have lived, but no blacks.

"The effect of the BHA's overall inaction on desegregation for the last 10 years is an endorsement of the racial exclusivity in South Boston," Laplante wrote.

The study also revealed that while minorities made up 84 percent of the people on the waiting lists for public housing throughout the city, whites received more than half of the public housing assignments. And minorities waited an average of nine months longer than whites for public housing.

The discrimination allegations initially angered many city officials, including the BHA's black executive director, Doris Bunte.

A former state legislator who lived in a Boston public housing project for 16 years and has directed the authority for three, Bunte said she delayed desegregation partly because she fears for the safety of black tenants in white projects.

Racial violence in the city's housing projects predates the busing crisis. In the late 1960s and early 1970s, a few black families were moved into predominantly white housing projects -- including Old Colony and Mary Ellen McCormack. But racially motivated fire bombings and shootings forced the BHA to move most of these families to predominantly minority projects.

But Laplante's letter to Flynn said the city could not use the city's history of racial violence as an excuse.

"HUD is very clear that public safety is not an acceptable reason for us not having done desegregation," Bunte said.

Charles Yancey, a black city council member, says that despite their fears, blacks looking for a place to live are willing to move to South Boston. "If the choice is between living in South Boston and staying on a waiting list, some families are going to want the chance to live in decent, affordable housing no matter where it is," he said.

Flynn has vowed that blacks moving into South Boston will be protected by police. And the authority is trying to organize a network of community and church leaders that will support new black residents.

A similar group was organized in 1984 when the authority moved several minority families into the Bunker Hill development in Boston's predominantly white Charlestown section. Today, 59 minority families, nine of them black, live in the 1,150-unit project, with no major racial incidents reported.

Although no federal deadline has been set, Bunte she plans to submit a new "race-neutral" tenant assignment proposal about March 1.

She would prefer to give tenants some choice in where they live -- perhaps by allowing them to reject their first assignment without losing their turn. But she says federal officials probably will require a "one-list/no-choice" system in which the next tenant on the list must accept the first available apartment.

"I don't think the government should be in the business of selecting neighborhoods for people," council member Kelly said. "And I don't think poor people should be treated like wards of the state just because they live in public housing."

But Laplante said the intense demand for housing in Boston makes it difficult to devise a system that permits choice and does not discriminate. Private housing costs in Boston, now among the highest in the nation, are soaring. The waiting list for public housing has grown from 9,500 to 14,500 in just three years.

"Making choices may be a luxury we can't afford," he said.