Henry Tang, one of the potential candidate for the upcoming Chief Executive election, right, and his wife Lisa Kuo, are mired in a controversy over a luxurious but illegal basement extension that's eating away at his already-low popularity rating. (Kin Cheung/AP)

Just a month before Hong Kong selects a new leader, the former British colony is experiencing something that Britain never allowed and that China, in charge here since 1997, certainly doesn’t want: a contest for the top job that increasingly resembles a real election.

Only 1,200 people — out of a population of 7.1 million — get to vote, but public opinion has now muscled its way onto center stage. Instead of the tightly choreographed transfer of power planned by Beijing, Hong Kong has produced a raucous political brawl featuring an illegal “underground palace” stocked with fine wines, a humiliated wife standing by her man and a flood of front-page headlines screaming of lies, cowardice and betrayal.

“Things have taken a very interesting turn,” said Jasper Tsang Yok-sing, a veteran pro-Beijing politician and president of Hong Kong’s local legislature who is pondering whether to throw his hat into an increasingly noisy and unpredictable ring. “If Hollywood made a movie like this, we would all have said: ‘It can’t be true.’ ”

Under British rule, Hong Kong’s leader, the governor, was sent from London. Locals played no role in his selection. He wore a funny hat with feathers. China, after regaining control 15 years ago, scrapped the hat, changed the job title to “chief executive” and set up a committee of local grandees to endorse a choice that most assumed would still be made in a distant capital, this time Beijing.

The carefully scripted plot, however, has suddenly gone haywire, adding another headache for China’s leader-in-waiting, Vice President Xi Jinping, who visited Turkey on Tuesday en route to Beijing after a trip to the United States. The political disarray in Hong Hong comes on top of an unexpected disruption to China’s own leadership transition, due to be completed at a Communist Party congress in October.

Until a week ago, the front-runner to replace Donald Tsang as Hong Kong’s chief executive was Henry Tang Ying-yen, a wealthy former senior civil servant and wine connoisseur from old Shanghai money. He had the backing of property tycoons, a host of establishment figures and Beijing. Although facing a feisty challenge from another Beijing-approved candidate — the more populist and also popular Leung Chun-ying — Tang was still expected to prevail and continue a cozy alliance between local billionaires and China’s ruling Communist Party which has dominated Hong Kong politics since the 1997 handoff.

Tang is now swamped by scandal following revelations that a family villa had, in violation of local law, been fitted with a 2,200-square-foot underground chamber allegedly equipped with a wine cellar, a spa and other luxury facilities. Tang denied that it was lavish but declined to let reporters inside to see for themselves. Television stations and other media outlets hired tall cranes to peer over the wall.

With most of Hong Kong’s residents living in tiny apartments far smaller than Mr. Tang’s illegal basement, the scandal over the “Tang Palace” has triggered an outpouring of anger over double standards. A Hong Kong University opinion poll published Sunday showed 51.3 percent of respondents want Tang to quit and nearly 80 percent think the revelations reflect poorly on his integrity.

After consultations with Beijing’s representative office in Hong Kong, Tang vowed to remain in the race. On Monday, he submitted his formal nomination papers.

Beijing has said nothing publicly. But, after days of mostly ignoring loud calls for Tang to give up, Hong Kong media outlets controlled by China’s Communist Party are rallying to Tang’s defense. Their efforts suggest that Beijing, supported by a clutch of tycoons, wants to stick with its original game plan.

Ta Kung Pao, a newspaper that reflects the party’s views, on Monday ran a front-page story dismissing Tang’s troubles as “greatly exaggerated” and asserting that he still enjoys wide public support. It gave no data to support this. An editorial Tuesday in the same paper suggested Tang was the victim of machinations by “a few” hostile media and “political forces that want to oppose China and bring chaos to Hong Kong.” The party frequently deploys conspiracy theories to explain developments it doesn’t like.

“Beijing has completely misread the mood of Hong Kong,” said Emily Lau, a Democratic Party member of the local legislature and a frequent critic of Beijing. “If they continue to push ahead and get Tang selected, that would be disastrous. People are hopping mad.”

Politicians at the other end of the spectrum also warn of a backlash if the 1,200-member selection committee ignores the public’s doubts about Tang’s integrity.

This would make Hong Kong “ungovernable,” Regina Ip, a conservative legislator and former security chief, told the government-funded broadcaster RTHK.

Wife takes the blame

At a news conference last week, Tang acknowledged that the underground “palace” — built under a swimming pool — was illegal but blamed his wife, whom he had earlier humiliated with an admission of an extramarital affair.

The wife, Lisa Kuo Yu-chin — fighting back tears and declaring that “this incident is all my fault” — told the media that she had only wanted “a happy and warm home for my husband and children.” The government’s Building Department is investigating.

Making his wife take the rap backfired, with Tang becoming a target of dismay and fury. “Sells Wife to Seek Glory,” read the headline of Apple Daily, a top-selling Chinese-language daily. “Drop Out of the Contest!” appealed the Oriental Daily. “It was my wife’s idea, says Tang,” read the front page of the South China Morning Post, the main English-language daily.

The scandal has not diminished Beijing’s power to make sure that the top job doesn’t go to someone it dislikes. A third chief executive contender, pro-democracy politician Albert Ho, stands no chance: Beijing has made clear it won’t accept a member of Hong Kong’s democracy camp as chief executive.

But the saga has highlighted the power of a free press and public opinion and introduced uncertainty to a process that began more as a coronation than an election.

“This is completely beyond Beijing’s expectations,” said Lau, the legislator.

Drama in Beijing

The blanket coverage of the tumult in Hong Kong contrasts with the silence of state-run Chinese media outlets on an even more unexpected, and more important, political drama playing out mostly in secret in Beijing ahead of the October party conclave.

Xi, the vice president, who visited Washington last week, is still expected to take over as Communist Party chief, but the transition to a new leadership team hit turbulence this month when Wang Lijun, a close ally of rising political star Bo Xilai, sought refuge in the U.S. Consulate in Chengdu.

Wang left the consulate after a day and is thought to be under detention in Beijing. His misadventure has cast a shadow over the future of his former boss, Bo, who had been expected to join the Politburo Standing Committee and thus become a member of Xi’s inner circle.

Tsang, the Legislative Council president, said in an interview that the storm over the “Tang Palace” might discomfort some in Beijing, which worries about more serious trouble once Hong Kong residents get to choose their leader by direct election in 2017. But, Tsang added, it shows that public opinion matters and cannot be ignored.

“If leaders in Beijing are wise — and most are — they will draw a very useful lesson from the present race” in Hong Kong, he said.