NEW YORK -- Its most crucial decisions are made about 2 a.m. Many of its members rarely bother to show up. And its chairman has denounced some of his colleagues as rude, deceptive and incompetent.

Yet it wields immense power in the byzantine world of New York City politics, exercising near-total control over where skyscrapers are built, how city money is spent and how the spoils of government -- from bus routes to computer contracts to cable television franchises -- are divided.

It is the eight-member Board of Estimate, a strange governmental hybrid that operated in the shadows for years, until the media spotlight landed on two members implicated in widespread corruption. Now its existence is threatened by a federal appeals court ruling, which has forced a mayoral commission to tackle the daunting task of reinventing a $25 billion city government.

The 2nd U.S. Circuit Court of Appeals ruled in October that the Board of Estimate's makeup violates the 14th Amendment and the principle of one person, one vote by giving equal weight to each of the five borough presidents.

Staten Island Borough President Ralph J. Lamberti, for example, represents a predominantly white community of roughly 350,000, no larger in population than Harlem or Bedford-Stuyvesant. But his vote on the Board of Estimate carries the same weight as that of Brooklyn Borough President Howard Golden, who has 2.2 million constituents, more than half of them minorities.

While the city appeals the 2nd circuit ruling, Mayor Edward I. Koch has named a commission to propose changes in New York's 262-page charter, which will be put to the voters in a binding referendum this November. Some panel members doubt that the Board of Estimate can be revamped without running afoul of the Voting Rights Act, which bars the city from making electoral changes that dilute minority influence.

Given its sweeping authority over zoning, land use, contracts and budgets, the board's demise would shift power to Koch and perhaps to the 35-member City Council, probably the weakest big-city legislature in the nation. Such a shift is being fought vigorously by the borough presidents, who, without their seats on the board, would be reduced to being $95,000-a-year ribbon-cutters.

Civil rights lawyer Richard D. Emery, who filed the suit on behalf of three Brooklyn activists, called the Board of Estimate "a vestige of a system of power in New York that benefited the moneyed interests, the real estate interests. It seems more like a cabal than a public body. Its hearings are meaningless because all decisions are made in advance by backroom telephone conversations."

To be sure, Koch -- who, like two other citywide members, has two votes on the board -- and some other members rarely attend the twice-monthly sessions. Instead, their "surrogates" listen to endless hours of testimony while the real action takes place in other City Hall offices. Still, some of the 18-hour meetings might have been halted by exhaustion, except that a nearby takeout delivers after midnight.

A single agenda can run to 500 pages, covering issues large and small: airport limousine service, the number of cooks needed in a Bronx soup kitchen, repair of chain link fences on the Throgs Neck Expressway, expansion of Saks Fifth Avenue, puchase of 12 radiation monitors, monthly payments of $736 to a policeman's widow, a permit for a sidewalk cafe in Brooklyn, landmark status for Broadway theaters, auction of a vacant lot in Queens.

But the hottest controversies, such as zoning tradeoffs for Mortimer B. Zuckerman's towering Columbus Circle skyscraper, invariably are decided during all-night marathons.

Brooklyn's Golden said that Koch, who controls the agenda and the clock, often delays controversial votes until long after reporters have gone to bed, then interprets the outcome at a news conference the next day.

"There are nights when I'm sitting there at 2, 3, 4 in the morning, and they say they've got to call the mayor," Golden said. This is a charade, he said, because "they already know how he's going to vote. They wheel and deal: 'I've got three votes; I need five votes.' They'll buy the one vote however they can get it."

After Golden opposed the mayor during a bitter controversy over shelters for the homeless last summer, Koch ordered city commissioners not to cooperate with requests from Golden's office. In a recent interview with the Daily News, Koch said that Golden was "rude," that Queens Borough President Claire Shulman had "deceived" him and that Controller Harrison J. Goldin, another citywide member with two votes, "gets away with murder" and "panders to the mob."

Koch reserved his highest praise for the third citywide member, Council President Andrew J. Stein, whom he called "a person of average intelligence."

The fight over Koch's plan to build 10 new homeless shelters underscored the board's parochial tendencies. After Brooklyn, Queens and the Bronx turned him down, Koch struck a deal with Manhattan Borough President David Dinkins in which Dinkins supported the plan with the assurance that none of the shelters would be built in Manhattan.

Staten Island was off limits to shelters because of an earlier deal in which Lamberti had agreed to accept a new jail instead. "That's the art of politics, extracting what you can for your particular constituents," Lamberti said.

Lamberti also cast the deciding vote on a plan to build garbage incinerators throughout the city, an issue crucial to him because all city trash is dumped at a Staten Island landfill.

The board was created in 1864 to "estimate" revenues for the coming year. When the city expanded and the borough presidents were added in 1901, the board was seen as a bulwark for the outer boroughs against the power of Manhattan's Tammany Hall.

But the borough chiefs' domain gradually dwindled until the early 1960s, when they lost their last major patronage haven, control of street and sewer construction.

"The boroughs are a sort of netherworld in between local and city administration," Emery, the civil rights lawyer, said. "They have no real function, other than as a place for people to complain."

Critics say borough lines also dilute minority influence. While minorities have captured nine of 35 seats on the City Council, no black or Hispanic has ever been elected to a citywide post, and only a handful as borough presidents.

If power were shifted to council members from smaller districts, Emery said, "Bedford-Stuyvesant would unite with Harlem and the South Bronx in alliances that serve minority interests."

Peter F. Vallone, the council's majority leader, also disdains the system. "We as a legislature -- all 35 of us, each representing 212,000 people -- can't even adopt a budget unless the Board of Estimate approves it," he said. "It's nuts."

Trying to govern without authority over zoning and land use, Vallone said, "is like having one hand tied behind our back. We get the blame, but we don't have the power."

Those who have the power argue that without the board to restrain him, Koch would become an "imperial mayor." And two members -- Manhattan's Dinkins, who is black, and Bronx Borough President Fernando Ferrer, a Hispanic -- argue that their presence gives minorities more clout than they could ever achieve on the council.

The concentration of power in such few hands presents ample opportunities for corruption, partly because members tend to defer to the borough presidents on matters involving their turf. After the 1986 suicide of former Queens borough president Donald R. Manes, investigators alleged that Manes had sought kickbacks for helping to arrange lucrative contracts for hand-held computers, parking-fine collections and cable franchises.

A second board member, former Bronx borough president Stanley Simon, resigned after being indicted in a national scandal involving the Wedtech Corp., a Bronx contractor.

One legacy of the board's arcane ways is a high degree of disinterest in local politics. Unlike Boston or Chicago, where politics is a passionate spectator sport, most New Yorkers would be hard pressed to explain what the Board of Estimate does or name its members.

"I suspect a very small percentage of the population really understands how the city works," charter commission chairman Richard Ravitch said.