From a mountain high above Heavenly Valley, a mountain at least temporarily free of the ski runs that wind through much of the evergreen terrain here, Lake Tahoe looks like a blue jewel set in the High Sierra. When the sky is crystal and the wind is up, the primordial lake can still lay claim to the 100-year-old flattery of Mark Twain, who called it "the fairest picture the whole earth affords."

Take a wrong turn down some devil chute, however, and you could land on another side of the lake. This one is edged on its southern shore by a honky tonk strip of gas stations, no-tell motels advertising hot tubs and satin sheets, and plush gambling casinos. When traffic backs up for miles on the four-lane road through the strip, as it does every weekend and most of the summer, carbon monoxide levels in the air here sometimes exceed those in Los Angeles.

The two sides of Tahoe, one a wilderness refuge of breathtaking beauty and the other a high-rolling Vegas by the Lake, attract more visitors each year, a quarter of a million on some summer days, than either Yellowstone Park or the Grand Canyon. Despite that popularity, in fact because of it, Tahoe has been fought over more fiercely during the last 15 years than a 49er gold claim.

Environmentalists, realtors and resort owners have battled over development in the Lake Tahoe basin in countless county board meetings, state and federal courts, and the halls of the U.S. Congress. The no-growth side argues that the lake, 22 miles long, 12 miles wide and stocked with four varieties of trout, has already had its world famous clarity clouded by runoff from the roads, casinos and condominiums built along its shore.

"Tahoe is going to hell in a handbasket," says James W. Bruner, the executive director of the League to Save Lake Tahoe, which has been the most militant, and successful, of the groups trying to stop further Tahoe development.

The pro-growth partisans say the lake is still clear enough to see from its surface a white plate suspended at a depth of 100 feet. The real issue, they say, is free enterprise and the right of a few extremists to dictate use of a national treasure.

"You know how some people are. Once they get inside, they want to close the gate," says Ken Kjer, a Tahoe realtor and the chairman of a Nevada regional planning agency which oversees development on the Nevada side of the lake.

The fight over Tahoe is similar to a thousand other battles between environmentalists and developers over choice real estate. But this one is more complex than most, involving five county governments in California and Nevada, both of those states' legislatures, a few presidents and a battalion of congressmen and federal court judges. And because the turf under dispute is so prized, both for its scenic beauty and its real estate value, the battle has been a four-star production from the start.

"Tahoe is a very sexy issue," says Bruner, who has worked full time on saving Tahoe for the last 10 years. "We're not talking about a district pond."

Sixty years ago, the Lake Tahoe area was home to a few large cattle ranches, some eccentric gold miners and the loggers who cut its pine and spruce forests to build nearby Virginia City. Then, in the late 1930s, casino owners in Reno decided to gamble on Tahoe as a site for expansion. Ski resorts came 10 years later. There are now 22 ski operations in the area.

As a resort, Tahoe was a natural. In winter, the snow was powder perfect for skiing. During the summer there was fishing and boating on the lake. And gambling fever became a year round affliction. Even from the parking lot of the new Caesars in Tahoe, the view is good enough to give an all-night gambler the impression he's done something good for his health.

By 1971, the south shore of the lake was so congested it prompted one Audubon writer to conclude that Tahoe was on its way to ruin because of "men of little vision who dance to the pipe of corporate land developers, Nevada gamblers, and the yahoo chambers of commerce of the cities and counties which control the Tahoe basin."

Between 1960 and 1980, the population of the Tahoe basin increased from 3,000 to 75,000. In 1970, an average of 29,000 cars passed through the south shore strip each day. Eight years later, that figure had almost doubled to 55,000. A few years ago, a federal report concluded that Tahoe was becoming "the very kind of urban environment which many (visitors) seek to escape."

At the end of the 1960s, citizen groups like the League to Save Lake Tahoe and the Sierra Club had put enough pressure on the California and Nevada legislatures to prompt a bistate planning agency for Tahoe. By most accounts it was an abject failure. But by the mid-1970s, aggressive court action had succeded in blocking some development.

Although the environmentalists were bucking house odds, backed by gambling and resort money, they had some highly placed friends of their own in Congress and various state legislatures. In 1980, a new bistate compact was signed by President Carter that mandated no new casino development in the Tahoe basin and set up a federal program to purchase undeveloped private land in the area to be deeded to the national park service and the Interior Department.

"We took on the gamblers and we beat them at their own game," says Bruner.

But the money appropriated by Congress to set up the land purchase program has been cut back in the last two budgets and Tahoe's protectors are concerned that their victory might turn out to be an empty one.

"The Tahoe issue is one that's not ever going to go away," says Bruner, sitting in his office on the south shore strip between a ski shop and a motel. "We're in the heart of the beast with one little light bulb burning. We can't become complacent."