Nellie Fong first met Martin Lee more than 25 years ago in London, where she studied accounting and he was on his way to becoming a lawyer. Fong later became Lee's sister-in-law, and their children have grown up together.

In Hong Kong, however, Lee and Fong have followed opposite political tracks.

Lee was elected to the legislature. He emerged as the colony's most outspoken advocate of democracy and nuisance to mainland China, which is to replace Britain as sovereign in Hong Kong in 18 months. He heads the Democratic Party, which emerged last September with the largest bloc of seats in the legislature and has been most vocal in protesting Chinese threats to curtail Hong Kong's bill of rights and abolish the local governing council.

Fong, who once was an appointed member of the legislature, accepted Beijing's invitation to become one of China's informal advisers to the colony. She is set to join China's new Preparatory Committee -- which is to lay the groundwork for abolishing the legislature after China assumes control here. It was Fong's informal advisory group that a few months ago recommended that Hong Kong's bill of rights be sharply restricted.

Lee and Fong still meet at family get-togethers but to keep them convivial "nothing is ever mentioned of politics," said Fong.

To many Hong Kong residents, the division between Fong and Lee underscores the loss of a moderate political consensus that existed in the years immediately after Chinese Premier Zhao Ziyang and British Prime Minister Margaret Thatcher signed a Joint Declaration in 1984. Under it, London agreed to relinquish sovereignty over Hong Kong in 1997 and Beijing pledged to allow the Westernized colony's separate system to remain intact for 50 years.

With the calendar now adding urgency, the political debate has grown heated, nasty and polarized. Lee and Fong represent the competing sides of the argument over how best to deal with a Chinese Communist regime eager to assert its authority here -- quiet cooperation or noisy confrontation.

"I believe confrontation will only push China into a corner," said Fong. "I've been labeled a more conservative person. Martin is a very pro-democracy person who is supporting a very fast pace of democracy for Hong Kong. I take a more cautious approach."

"People like Martin think we're kowtowing to China," Fong said. "I don't think we are. We're trying to build trust." She added, "Maybe that's the difference between an accountant and a lawyer."

Lee, for his part, said his party's victory in last September's election underscores his claim that Hong Kong people do not want politicians to be conciliatory toward China but to take strong positions on Hong Kong's rights.

When China began drafting the Basic Law that is to serve as Hong Kong's constitution, all views were represented on the committee, including Lee and the Democrats. But that was before China's bloody crackdown on democracy demonstrators at Beijing's Tiananmen Square in 1989. Hong Kong rallies in support of the Beijing demonstrators drew an unprecedented 1 million people into the streets of the colony.

Beijing's suppression of the movement at once unnerved Hong Kong residents and polarized its politics between supporters and critics of China's Communist government.

"There's no middle ground," said Tsang Yok-sing, the secretary general of the Democratic Alliance for the Betterment of Hong Kong, the political party most closely identified for its pro-China view. "That's unfortunate. I'm the kind of person who always wants to settle on the middle ground. But there is no middle ground. There is a wide gap. You are either on one side or the other side."

"Back in the days before 1989, we would have Martin Lee, Szeto Wah, Emily Lau sitting across from the Chinese side, and have very heated debates about the future of Hong Kong," said Tsang, ticking off the names of other popular, pro-democracy politicians in the colony. "Those days are gone," he said.

China now refuses even to talk with representatives of the Democratic Party or other popularly elected local politicians who are deemed "subversive." Last week, when China unveiled the members of its Preparatory Committee that will oversee the transition, Democratic Party members were notable by their absence.

Of 150 Preparatory Committee members, 94 are from Hong Kong, and that contingent is dominated by the colony's powerful business elite. The group includes 21 heads of companies that control 36 percent of Hong Kong's stock market, according to one estimate. Only 14 elected legislators are included, almost all from pro-China or pro-business parties.

Fifty-six other Preparatory Committee members are mainland Chinese, mostly government officials and academics. The group is headed by Chinese Foreign Minister Qian Qichen.

The main job of the Preparatory Committee is to form a separate group that will choose the future chief executive for Hong Kong and appoint a provisional legislature to take over from the existing, elected legislature -- which China has pledged to abolish.

The heavy business representation on the Preparatory Committee is meant to signal China's intention to make sure Hong Kong's economic prosperity is protected during the turnover. Business leaders have been less outspoken about such political concerns as guarantees of personal and press freedoms.

Some here charge China is adding to the polarization in the colony, further isolating the pro-democracy voices and virtually guaranteeing a more heated, antagonistic transition that could persuade more residents to leave. According to some surveys, 100,000 of the 6 million people may leave for other countries this year. Immigrant visa applications to Canada were up 70 percent in 1995.

"By excluding all of us, the Beijing government has clearly indicated . . . that it doesn't seem to attach too much weight to public opinion in Hong Kong," Lee told reporters after the Preparatory Committee list was revealed.

"Everybody agrees it's important for the Chinese government to open a dialogue with the Democratic Party," said Tsang. "We have been in contact with both sides." But in a measure of frustration, Tsang said he has given up trying to be a mediator.

"We see the difficulty for either side to change its position," he said. "The moment the Democratic Party makes any effort to openly court the Chinese government -- if they try to openly adopt a more conciliatory attitude and express their wish to make compromises with the Chinese government -- they will lose some of their support in Hong Kong."

"The Chinese government, I see their difficulty too," Tsang said. "Even if some officials see it difficult to maintain their nonrecognition of the Democratic Party, they are worried about what kind of signal will be sent to Hong Kong people. So this polarization is very real and very damaging."

"Suspicion breeds suspicion," Tsang said. "We are looking for an opportunity to break this vicious cycle." CAPTION: Hong Kong's Democratic Party leader, Martin Lee, waved a flag at a legislative election rally last September. China has ostracized him.