These are weighty times for the city that likes to think it is moving up on Atlanta--or Hong Kong--as an international powerhouse. Already recognized as the nation's second-leading banking center behind New York, Charlotte's spirit of harmony has been the pride of officials here: Where others fought and even rioted, Charlotteans discussed.

The topic on the table now, however, is one that frets at the very fabric of the community, its history and self-image: Where will the 100,000 area students attend school; how will school assignments be made; and to what extent, if any, will racial diversity be sacrificed? The issue has galvanized the nation's 23rd-largest school system--a trendsetter 30 years ago when it launched busing as a means toward racial balance--and may have tremendous significance for school districts across the nation where race-based measures are still applied.

A recent federal court ruling has thrown the old way of doing things here into disarray, challenging school officials and the community to come up with some smart, fast solutions. In September, U.S. District Judge Robert Potter ruled that the Charlotte-Mecklenburg system, which is 40 percent black, had achieved desegregation "quite some time ago" and had eliminated "the vestiges of past discrimination."

In effect, Potter freed the schools from nearly 30 years of court supervision brought by the famed 1969 U.S. Supreme Court decision in Swann v. Charlotte-Mecklenburg Board of Education that led to the busing of thousands of local schoolchildren from their neighborhoods. He also decreed that any measure based on race, including the city's pioneering busing program, could no longer be a factor in school assignments.

Potter's ruling put Charlotte-Mecklenburg in the company of Denver, Cleveland, Nashville, Norfolk and about 40 other school districts that have been released from court supervision in the decades since the federal desegregation of America's schools began. An additional 500 school districts involved in about 210 court cases remain under federal order, said Christine DiBartolo of the Justice Department.

In many cases elsewhere, school officials have been glad to be rid of the federal yoke. But not here, where many school officials took the unusual stance of arguing that they had failed to meet the court's demands, that integration had not been adequately achieved and that the reliance on busing, for now at least, should not change. They preferred to ease in new programs over a five-year period.

A divided school board and a group of black leaders have appealed Potter's ruling, but without a stay from the judge, new school assignments for as many as 60,000 of the system's 100,000 students will have to be devised fast--for the next fall term.

The lawsuit propelling this monumental shift was filed in 1997, when a white parent sued the school board after his daughter was denied entry into an elementary-school magnet program because she was classified as "nonblack." After the family moved from the area, six other white parents continued the suit, reasoning that if school officials would not ask the court to release the system, they would.

"We've been walking on crutches--they have institutionalized a remedy that was never meant to be a permanent order," said one of the parents, Larry Gauvreau, who lost his bid for a school board seat in an important election last week. Had two black incumbents lost to Gauvreau and another candidate from among the neighborhood-school forces, the decision by the board to appeal Potter's ruling would likely have been dropped.

For Charlotte, a leader of the New South, the timing of this sea change is critical. The first, and one of the last, of the major school districts to have extensive busing, this is not the same city it was 30 years ago. Where once newcomers were other Southerners, now they arrive from around the country and indeed the world, at a rate of about 3,000 new students a year.

City leaders, meanwhile, have been busy, wooing professional football and basketball teams and producing an impressive skyline of business towers and spires and a bustling international airport that features the homey touch of rocking chairs. They boast of an image both progressive and conciliatory: Among the first of the larger Southern cities to elect a black mayor, Charlotte has leaders who are united in the belief that controversy is bad for business. Everyone wants to be able to brag about the school system.

"It's been quite controversial--there's one group of folks that say, 'Well, it's time to move on, we've been there, done that,' in terms of busing," said David Goldfield, a professor of Southern history at the University of North Carolina-Charlotte and author of a book about the Swann ruling, "Black, White and Southern." "And there's another group of folks that believe our positive response to the busing situation 30 years ago really defined our community. Busing is an integral part of our community's specific culture, showing that we can get along with each other and surmount traditional difficulties--and concentrate on the business of business."

But, as the greater Charlotte area's population has expanded to more than 635,000, the nature of the city has been redefined. The suburbs, where most of the growth has occurred and the majority of new white residents have congregated, have received the newest schools and the latest equipment.

The inner city, where 120,000 of the county's 165,000 black residents live and where magnet schools with special programs were located to attract an array of students, has lagged significantly. School officials estimate the costs of turning those schools into first-class neighborhood facilities will run into millions of dollars. The county commission recently rushed to approve an initial outlay of $50 million, and has agreed to propose millions more in a bond-referendum set for next year.

At a school board meeting slated for Tuesday, Superintendent Eric Smith, who has been hailed for his professional demeanor throughout the legal battle, will unveil a school-choice plan that is likely to be widely debated in public hearings until it comes to a vote in December.

"We will have choice zones," said John Deem, spokesman for the Charlotte-Mecklenburg schools, "and within those zones, some parents can choose from any school in those zones, based on high-school feeder areas. Or they can choose magnet schools as they do now. Each student also will be guaranteed a seat in a school close to home, if that's what they choose."

But black leaders fear one outcome is inevitable: Their children will again be shortchanged.

"History has shown neighborhood schools mean separate and unequal," said Lanny Springs, a Charlotte banker who serves on the national board of the NAACP. "Blacks are not going to get the kind of facilities or curriculum that white kids get. That's the situation at hand. If we go back to segregated schools, then nothing would have been accomplished--we'll be in the same situation we were in prior to 1954 [when court-ordered desegregation began] and prior to 1969."

Although Springs and others are hoping the case will wind up in the U.S. Supreme Court, some legal scholars predict that they may not like the atmosphere there: The era of race-based initiatives appears to be over.

"I would expect the judge would be affirmed, quite frankly. His conclusions of the law are well-supported," said William Van Alstyne, Perkins Professor of Constitutional Law at the Duke University law school. "For the most part, the Supreme Court has taken the view that you can't have race-identity cards, to be classified and allocated, to be forced to stand in racial queues. The old way was, stand in a racial line at the movie theater. Now, it has been, stand in racial lines at the magnet schools."

CAPTION: School board member Louise Woods, left, hugs Sarah Stevenson after a 5 to 4 vote to appeal an order ending race-based student assignments.

CAPTION: Students look out of a bus in Huntersville, N.C. In September, a judge ordered an end to busing and other measures to achieve racial balance in the Charlotte-Mecklenburg system.