A few dozen feet before the lush mountain entrance to Machu Picchu, the "Lost City of the Incas" that is one of the world's foremost archaeological sites and a mecca for New Age spiritualists, visitors are greeted by a wooden sign welcoming them to "MACHU PICCHU, INC."

The INC. stands for Peru's National Culture Institute, but the sign has a double meaning these days--one that has business interests squaring off against preservationists in the biggest controversy here since the American explorer Hiram Bingham came to Machu Picchu in 1911 and brought it to the attention of the world.

Armed with the winning bid on a government franchise, Lima-based Peru Hotels, Inc., and several foreign partners plan to build a high-tech cable car to ferry visitors up to Machu Picchu from a train station in the tiny town of Aguas Calientes in six minutes. Most tourists now make the trip--two very vertical miles--on buses that wind for 25 minutes up a dirt road to the main entrance.

In another partnership, Peru Hotels and Orient-Express, the British company that takes rail passengers through Europe in pampered luxury, plan to bring the region a touch of Inca chic: a new five-star resort on the Urubamba River down the mountain from the ruins. The partnership this week also won a concession to improve and expand service on the run-down government train linking Aguas Calientes with Cuzco, the historic city 76 miles to the southeast where flights from Lima land.

The projects, the first serious capital improvements in three decades, are designed to double the number of visitors to Machu Picchu in five years, from 1,300 to several thousand a day. The economic benefits are obvious in a poor country that earned $177 million from tourism last year. But the plans have ignited a passionate debate over the wisdom of marketing what leading academics see as perhaps the most mysterious surviving monument of pre-Columbian culture.

Some academics say a surge in tourism to Machu Picchu during the 1990s has already put dangerous stress on the site, causing serious erosion and fissures. They argue that more development will endanger the ruins as archaeologists are still trying to unravel their mysteries--such as how a culture that had yet to discover the wheel could move stones weighing several tons to build temples and walls.

Some Peruvians also resist the introduction of foreign companies at a site they regard as a symbol of national identity. Others worry that easy access and greater numbers of visitors--the shorts and snapshot set--will destroy the sense of mystery and discovery that still grips those who seek out the remote ruins.

"Machu Picchu should not be reduced to a place where thousands of tourists rush through, spending 15 minutes to capture something on their camcorders and then leave," said Patricia Uribe, country director for the United Nations Educational, Scientific and Cultural Organization (UNESCO), which has placed Machu Picchu on its list of World Heritage Sites. "It's cheapening, like taking a fine restaurant and serving fast food inside of it."

But supporters say those arguments are overly idealistic, pointing to the fact that the surrounding area is woefully underdeveloped. The argument in this distant corner of South America echoes debates around the world--from the Great Wall to the Roman Coliseum--where officials balance the lure of tourist dollars against the aesthetics of preserving natural or historical wonders.

"We understand that this is a site that belongs to the world, not just Peru," said Roberto Persivale, director of Peru Hotels, Inc. "We are only looking for reasonable improvements that will enhance the experience for tourists and create jobs for the people in that part of Peru."

Some Machu Picchu visitors, mostly young backpackers, make a four-day trek from Cuzco to Aquas Calientes along the ancient Inca Trail, believed to be an old supply route, without so much as a clean hotel room along the way. But most visitors arrive on the train that leaves once a day from Cuzco and takes 3 1/2 hours to get to Aguas Calientes, a dismal village of trinket vendors with two tiny hotels at the base of Machu Picchu's mountain--and where development companies are now proposing the five-star riverside hotel.

It would offer an alternative to the shabby, officially sanctioned hotel at the ruins themselves, a 32-room functional property where rooms go for $200 a night or more. Limited space and the high price tag mean that most visitors must head back in three or four hours to take the only return train back to Cuzco.

"The infrastructure we now have is pathetic for a site as important as Machu Picchu," said Gustavo Caillaux, head of Peru's privatization committee. "We understand our responsibly to protect Machu Picchu for the world, but I think we've got to be reasonable. It's time we make it easier and more comfortable to experience Machu Picchu."

The issue is so fiery in part because scholars still know so little about Machu Picchu, or "old peak" in the Quechua language. It remains one of the best clues to understanding the Inca empire that ruled a domain that extended north through modern Colombia and south to Argentina and Chile before the Spanish conquest in the 16th century.

At first glance, the Inca city 8,000 feet in the clouds, surrounded by vertical cliffs covered with green trees and bright orchids, seems like a medieval citadel, constructed ingeniously with a system that made many of its buildings earthquake proof. Some archaeologists believe it dates back to the rule of the Inca King Pachacutec in the early 15th century, but solid information is so scarce that even that is in dispute. Some academics trace Machu Picchu to pre-Inca times. Even more mysterious is when and why it was abandoned, perhaps sometime in the mid-17th century.

In overwhelmingly poor Peru, where tourism is the second-largest generator of foreign currency, Machu Picchu has recently become more about economics than science. In the 1980s, helicopters were used to fly some visitors directly into the heart of the site, after former president Alan Garcia authorized knocking down a large stone in Machu Picchu's central square to make room for a landing pad.

Although helicopters must now land 20 minutes away, the decline of guerrilla activity and newfound fame generated by books like the best-selling "The Celestine Prophecy: An Adventure" suggesting that Machu Picchu is a source of mystic energy have helped create a tourism bonanza. More than 334,500 people visited the ruins last year, almost four times the number in 1991.

Opponents say the new plan would cause further erosion, adding that not enough studies have been done on the effects that vibrations from the cable car could have in a region prone to rock slides and mudslides. Critics argue further that the cable car and one of its towers, visible from several points within the ruins, would destroy the Machu Picchu experience.

"You'll be walking around the Temple of the Sun and suddenly you'll see a big cable car coming toward the ruins--it shatters the spell of Machu Picchu," said David Ugarte Vega, an anthropologist at the National University of Cuzco. "We can already see that happening through an excess of visitors. Machu Picchu is losing its magic."

"Come on, we're not talking about building a shopping mall," Caillaux protested. "Even the Great Wall of China has a cable car!"