Whether it is directly related to the recent events in Taishi or not, at least there is the appearance of something good coming out of the whole thing. The SCMP:

Guangdong authorities have pledged to comb through the accounts of every town, village and village group in the province to clear up financial irregularities at the grassroots level...Villagers and farmers lodged about 150,000 petitions with provincial authorities in the first eight months of this year, most relating to alleged corruption over rural land acquisition, problems in village committee elections, and land and forest ownership disputes, the News Express reported.

"These problems have encroached on the interests of the masses, sharpened social inequities, damaged the stability of grass-roots regimes and undermined the reputation of the party and the government," the newspaper quoted the inspection committee as saying.

Guangdong has also promised to improve the way towns and villages are managed, particularly in terms of finances and cadre supervision. The changes mean party and government officials will not be allowed to have part-time jobs or receive payments from state-owned, collective or private enterprises..."Chinese villages lack professional accounting personnel and a standardised financial management system," Professor Xu said.

Dang Guoying , a rural affairs analyst, said the root of rural financial corruption was the village committees' excessive power over finances.

From village protest to national flashpoint

The scourge of corruption has turned Taishi's experiment in grass-roots democracy into a display of people power.

Taishi is a tiny village in the richest and seemingly most open province on the mainland and yet a legitimate attempt by its residents to oust their chief for corruption has been crushed with the help of gangsters. The crackdown exposes the ambiguity of the central government's stance on democracy and underscores its fear that Taishi might have a domino effect in a region riddled with land-related corruption.

But Taishi is, at most, a localised corruption scandal that permeated the township government and is unlikely to implicate anyone in Guangzhou, much less in Guangdong or far away Beijing.

With a population of 2,000, Taishi is a 45-minute drive south of Guangzhou. Once a model village, its inhabitants complain of poverty, even though bustling shops, busy factories, thriving sugar cane farms and banana plantations stand on land they used to farm.

Elderly women have been the hardest hit. They are unable to support themselves from the dividend income from leased properties and farmland, and have been forced to eke out a living by scavenging.

The villagers blame their plight on Chen Jinsheng , who was re-elected as village chief in April. Mr Chen garnered 60 per cent of the votes, but the poll came before allegations that he had embezzled funds from the village collective.

On July 29 they launched a campaign to remove him from office by popular vote. During a three-month stand-off that followed, local authorities, using more than 1,000 police and water cannon, threw villagers in jail, seized ledger books and paid thugs to beat activists, lawyers and foreign reporters.

They rejected the recall petition, then announced it had been accepted, only to announce soon afterwards that the villagers had given up their action. The people are now being held hostage in their own village.

Sources with close contacts with villagers say groups of cadres fanned out to visit each of the 500 households to make them sign the withdrawal document.

"Every household has somebody who has been arrested. They were promised that their family members would be released if they signed, if not, they would go to jail for three to 10 years. The villagers are realistic, so they signed," one source said.

The family of Feng Weinan , one of the leaders arrested, received a notice saying power and water supplies to their apartment would be cut off. Other villagers were told they would lose their jobs, their children would not be able to go to school or they would be harassed by thugs.

"Their wives were crying, so the men had to sign," said Lu Banglie , an activist who advised the villagers on recall procedures.

Mr Lu said cadres promised a household of four or five voters about half a hectare of land if they would spy for the village committee and help keep Mr Chen in power.

The villagers were also told that lawyers and reporters had wrecked their economy and they would get no dividends this year. Previously, the committee that manages village assets paid each villager 1,000 yuan a year and claimed that Taishi was in debt.

A propaganda official from Yuwotou, the town that administers Taishi, told two foreign journalists that 396 villagers signed the withdrawal statement voluntarily after an audit of village accounts cleared Mr Chen. Only 188 refused to sign.

Giving the reporters a copy of the Guangzhou Daily, he said: "Everything we want to say is here. You can also read about it in the Southern Metropolis News and other newspapers. There is no need to report on this any more. We will not give any more interviews."

The official statement said the recall petition was legal, a move that analysts said gave the authorities justification to break the blockade of the village office and seize account books allegedly incriminating Mr Chen on the grounds that the villagers had broken the law and obstructed village government.

The next move was to identify the "black hands" behind the unrest: Mr Lu, Yang Maodong - a prolific writer and activist better known as Guo Feixiong - and Ai Xiaoming , a gender studies expert at Sun Yat-sen University, who was interested in the involvement of women in the Taishi struggle.

Mr Yang has been taken into custody and Mr Lu was beaten up, but Professor Ai is still free, though her website has been shut down.

The village itself is guarded by mercenaries who are paid 100 yuan a day to beat up any foreign visitors, while the local media has been muzzled.

Analysts believe that Taishi started off as a test case for grass-roots democracy because Premier Wen Jiabao said last month that if people could manage a village, they could manage a township in several years and that would be "an evolving system".

Pro-government scholar Fan Yafeng drew attention to Taishi's significance, strengthening the argument, and yet a local government source said there had been no directive to push for grass-roots democracy.

Cheng Li, professor of government at New York-based Hamilton College, said the central government had called for an experiment and so could not crack down on it.

"I don't think we can put it down as a crackdown, but they think there is something wrong with the experiment. I don't go as far as to say that they are ready for democracy," he said. "They want to push for democracy but they want to be their own monitor."

In the first eight months of this year, the Guangdong discipline commission received 150,000 complaints about corruption, cadre misconduct or election irregularities, an average of seven per village in the province.

"I've heard that many villagers went to Taishi to learn from their experience," one mainland expert in grass-roots democracy said. "If Taishi succeeded, they would do the same."

Mr Yang, on the lookout for opportunities in the Pearl River Delta, saw the legal issues in the land deals and was able to persuade villagers they had a problem.

Taishi captured international interest because Mr Yang had an action plan to use passive resistance, hunger strikes and the foreign media to raise the profile of the dispute.

The timing was opportune because the director of Yuwotou, which administers the village, had just been reassigned to another town, leaving a young deputy to hold the fort.

From a run-of-the-mill attempt to recall a village headman, the situation in Taishi deteriorated to such an extent that Beijing stepped in and designated it an important political incident.

"It has acquired the same status as the Sars outbreak in 2003 and the Falun Gong," one scholar said.

But Guangdong, living up to its reputation as a renegade province, chose to maintain a degree of independence, which might help explain the handling of Taishi.

Despite the crackdown, Mr Lu described Taishi as a success.

"Taishi shows the world the ugly side of local government and teaches villagers the value of their votes," he said. "In the past, they thought that whoever you vote for, it makes no difference. They sold their votes for 100 yuan or a pack of cigarettes."

Mr Lu believes that the Taishi villagers will prevail against their village chief in the next election in three years' time. And he predicts that if the party is supportive, grass-roots democracy could be a reality in three to five years. "If not, it will take 20 years."

Dangers of working with foreigners

Beyond the daily drill of research, press conferences and interviews, foreign journalists in the mainland are inadvertently mired in a menacing world of intrigue and espionage. But the danger is, for the most part, not directed at them, but rather at the people who co-operate with them as they gather news. The mainland is not the world's greatest fan of media scrutiny, to say the least. The foreign press corps have always had to deal with the likes of none-too-secret agents on their tail, phone taps, bugged offices and local employees who are encouraged to operate as government spies.

All that is still in place. But the methods of surveillance have become more sophisticated - if not always more subtle. A European journalist on a recent reporting trip to the central provinces was using her mobile phone to try to track down a local activist. While she was talking, a voice broke into the conversation and scolded her for sticking her nose into local affairs.

Another journalist tells of how she interviewed a source in a noisy local restaurant one evening. The next day her mobile rang and she heard the last voice she expected: her own. The call was a recording of her conversation in the restaurant. She has no idea if it was some kind of bounce-back blip in the hi-tech spying game, or whether it was spooks wanting to let her know they were on her case. Either way, it was a jolting reminder of the system's invisible eyes and ears.

The latest technology that is pleasing spies and jealous spouses alike is a chip that can secretly turn a mobile phone into a microphone. Security experts say the phone's software is adjusted so that when the phone is called from a certain number, it will answer automatically without ringing, vibrating or lighting up - essentially turning it into a bugging device.

All this, and the many other hi-tech eavesdropping and tracking devices now available, can spell danger for the sources who talk to journalists and the Chinese people who work with them. Foreign reporters here are sometimes hassled, impeded from doing their work, forced to sign self-criticisms and, in some cases, threatened or even roughed up.

But it is very rare that their lives are endangered or their freedom jeopardised. For Chinese it is a very different matter. On any kind of sensitive issue sources, news assistants, photographers, support staff and the like run a far greater risk of being beaten, imprisoned or worse, for helping foreign reporters. Their attackers are often thugs who have been hired to do the dirty work.

This reality places a "huge burden" on journalists based on the mainland, according to Melinda Liu, Newsweek magazine's Beijing bureau chief and president of the Foreign Correspondents' Club of China. "It is a very big issue for us," she said, as before doing any story they must first evaluate who is going to be involved and assess what danger they might be exposed to.

"We have to figure out if it's worth taking the risk," she said. "There are some stories we just won't do because we feel it's too dangerous. But if we were to be 100 per cent careful in every case, we would simply not be able to do our jobs."

In many cases, the Chinese involved are prompted to take risks by a desire to get the information out, knowing it would never be published in China. The call could only be made on a "gut feeling, on a case-by-case basis", Ms Liu said, and no one could predict how situations would develop. "Sometimes you are going to make the wrong call. It is a huge dilemma."

And if it all means some controversial stories go unreported, it is a dilemma that seems to suit the more opaque elements of the state perfectly well.

Life's been tough for injured activist from the very start

Activist Lu Banglie's savage beating in Taishi village was not the first time he found himself in a life-threatening situation. Threats to Mr Lu's life started even before he was born, with his impoverished mother trying repeatedly to end her pregnancy.

"My mother was 48 or 49 when she conceived me and she tried several times to abort me but she was stopped. We were very poor and she didn't think that at her age she could raise another child," Mr Lu said.

"When she delivered me, she let me fall to the ground. She just sat in her chair and refused to pick me up. It was her sister-in-law who picked me up."

Mr Lu, a boyish-looking 34-year-old divorcee with a seven-year-old daughter he hardly ever sees, has been threatened on many occasions but remains unfazed. He has been hacked and beaten unconscious, but his experience in Taishi was the worst because he was knocked out for a day.

"If I was afraid, I wouldn't be doing this," he said. "I bought insurance before I became an activist because I knew it would be dangerous. I pay 444 yuan a year for a policy amounting to 180,000 yuan. In the event of my death, the money will go to my daughter and my mother," he said.

He says he limits his time with his daughter to shield her from the dangers of his mission.

His own mother came to love her youngest child and found enough money to put him through two years of senior middle school.

Growing up, he saw how hard the peasants' lot was and became a victim of fraud himself when he tried to secure a contract to mine sand.

"I was very angry. Peasants lead a hard life and cadres not only do not care but lie about the real situation," he said. "My anger burned inside me and I wanted to do something for the laobaixing [ordinary people] so I started going to Beijing to petition, to give them feedback about the reality and to ask them to lighten peasants' burden."

A year or so later he returned empty handed and frustrated to Hubei , but the people he met while in Beijing made him realise that petitions were not the way to go.

He later met people from China Reform Magazine and attended training courses organised by the magazine and began to consider running for election so that he could better serve the peasants.

"I thought I could use the Villages' Organisation Law to push for democracy and economic development," he said. "With this in mind, I ran for election but I was unsuccessful because the election was rigged."

Mr Lu changed tack again and organised the ousting of the headman of his native village, Baoyuesi, in 2003.

He succeeded, and took over as village chief. A few months later, overwhelmed by the village's debts, he stepped down.

He went to Beijing again this spring to consult experts on ways to push forward rural development, but after again coming up empty handed moved south to Huizhou , where he found a job in a packaging factory.

In July, he was again unsuccessful in another attempt to seek inspiration in Beijing and returned to Guangzhou to find a job.

It was in Guangzhou that he ran into Yang Maodong , an activist better known as Guo Feixiong , whom he had met in Beijing, at a dinner and was told about the problems of Taishi.

"We talked about Taishi and decided to recall the headman," he said. Mr Lu said he would not return to Taishi in the near future, but would take time to recuperate from his injuries and reconsider his strategy.

Here lies the truth

With only a bruise on his right elbow to show for the beating he was given by thugs in Guangdong, pro-democracy activist Lu Banglie is in a forgiving mood towards the British journalist who told the world he had been mutilated and left for dead. "He seemed young and I don't think he was very experienced," said Mr Lu, 34, as he recovered from his ordeal with friends in Hubei province . "He was caught up in a very frightening situation. In those circumstances it is understandable that he got it wrong."

Benjamin Joffe-Walt's report - splashed on the front page of Britain's The Guardian newspaper on Monday last week - described in graphic detail how Mr Lu was apparently killed by a group of five to six men in Taishi, Guangdong, the scene of rural unrest.

Mr Lu had been accompanying Joffe-Walt and his translator when they were stopped and Mr Lu, a legislator from Hubei who has helped villagers try to fight for their legal rights, was dragged out of the taxi after being recognised by the mob.

In a shocking report, the 25-year-old reporter said he saw Mr Lu lying on the ground "his eye out of its socket, his tongue cut, a stream of blood dropping from his mouth, his body limp, twisted ... the ligaments in his neck were broken". It seemed a brutal indictment of the abuses of power in rural China - until Mr Lu appeared in his home province, very much alive and without any serious injuries, on the same day the sensational report in The Guardian was published.

He had been beaten unconscious, and bundled into a car and driven back to his home province, hundreds of kilometres away. Mr Lu has since undergone medical examinations and internal scans that reveal no lasting injuries.

So how could the journalist have misjudged the situation so gravely? Looking at copies of the newspaper's reports, Mr Lu said: "I was wearing a red shirt and it was dark. Maybe he saw the colour of my shirt and thought it was blood. As for my eye popping out, perhaps he just saw the reflection of the torches being shone in my eyes.

"His report is obviously false, but I believe it is the government's fault that things like this happen. If the government allowed journalists to report what is going on in these villages, these kind of false reports wouldn't appear. If they let people go freely into these places, people would know the truth."

Joffe-Walt's employers have been less generous in their appraisal of the report filed by the American former high school teacher who began working as the newspaper's Shanghai correspondent last month.

In a blunt article by the newspaper's own ombudsman on Monday, the newspaper said Joffe-Walt had been recalled to London and examined by a psychotherapist, who had concluded that at the time of writing, he had "lost touch with reality".

The article spoke of the reporter's "grave flaws" and "gross errors and exaggerations" and said his report had "threatened the credibility and integrity of The Guardian's reporting in China".

It emphasised Joffe-Walt's relative inexperience, saying: "His main experience has been gained in six months working for a South Africa newspaper ... and an overlapping period as a stringer [for] a British newspaper, The Sunday Telegraph."

The story of how the paths of two idealistic young men from hugely different backgrounds - one a western journalist and the other a Chinese activist - came to cross with dramatic results in the south of China is an intriguing and unlikely one.

As recently as 2003, Joffe-Walt was working as a high school teacher in Canada. He went to Baghdad as a human shield, one of a group of anti-war activists who tried to put themselves in danger's way to stop a US invasion.

Afterwards, he told his hometown paper in the US, the Philadelphia Daily News, that the experience was "very stressful" but that he would be prepared to go back and put himself in harm's way for the anti-war cause.

Joffe-Walt chose not to return, it seems, but instead headed for Africa, where he began a new career as a newspaper reporter, working first for South Africa's This Day newspaper and then as a stringer across Africa for The Sunday Telegraph.

He filed harrowing stories from across the continent, visiting flashpoints including Darfur and picking up an impressive brace of awards in the process - young journalist of the year from the Foreign Press Association in London and CNN African print journalist of the year in June this year.

Joffe-Walt's transformation from high school teacher to frontline war reporter took place at the same time as a sea change in Mr Lu's life. A farmer in Hubei, Mr Lu became increasingly disillusioned with the abuses of power in rural China and decided to fight for the reduction of taxes on poor farmers.

As his marriage broke down and his wife took their daughter, now seven, to live in a new home more than 20km away, Mr Lu became increasingly involved in his political activity, taking advantage of rural reforms to win a seat in 2003 as a provincial legislator.

"I got involved in politics because I saw how the lives of farmers are so hard and so bitter, and the local governments and village committees are so unreasonable," he said. "I wanted to change it."

He had been immersed in the fight for villager rights in Taishi for weeks before he met Joffe-Walt, two Saturdays ago. Standing in for The Guardian's China correspondent, Jonathan Watts, the young reporter went to Guangdong to report on the unrest.

They spent only a few hours together before the drama on a roadside near Taishi.

Joffe-Walt claims he asked Mr Lu to get out of the car three times before they stopped at a security roadblock, but Mr Lu said: "I reassured the reporter I would be OK. I told him I have a big life inside me ... I told him he didn't need to worry about my safety."

Reflecting on what happened to him, Mr Lu said: "I don't believe they were trying to kill me, because if I had died it would have caused a big controversy. They just wanted to scare me so I wouldn't go back again. But I will go back. I am not afraid."

Joffe-Walt returned to Shanghai the day after the attack, arriving just in time to catch the end of an opening party for his office - set up with a group of other reporters working for newspapers overseas and nicknamed "the writers' commune" by fellow journalists.

It would appear that he filed the report late on that Sunday night, Shanghai time. The Guardian said it arrived "only an hour before deadline, which left little time for interaction" and described his original copy as "3,500 words in a graphic stream-of-consciousness narrative".

After the story broke, events moved quickly. Joffe-Walt was summoned to a meeting in Hong Kong with The Guardian's diplomatic editor, Ewan MacAskill, who was flown out from London to interview him. Watts was meanwhile recalled from holiday and sent to interview Mr Lu and arrange for a medical examination.

Joffe-Walt was then flown back to London where The Guardian said he "expressed repeated apologies for what he had done and its implications for The Guardian, and indeed for the pro-democracy movement in China".

Journalists in Shanghai were meanwhile bemused at the saga of the young journalist who had only just arrived in the country and now appeared to be making one of the quickest exits on record, a day after his welcoming party.

One senior Shanghai-based journalist, who asked not to be named, said: "One of his colleagues said he had a flair for the dramatic, which isn't necessarily a bad thing for a journalist. But it seems that in this case he may have gone a bit too far."

Whether Joffe-Walt has a future with The Guardian remains to be seen. Monday's article announced that the British newspaper, which prides itself on its high standard of journalism, has to protect its own reputation but also has a "duty of care" for its young reporter.

What becomes of Joffe-Walt is a matter of relative indifference for Mr Lu. Although Joffe-Walt has been under a psychotherapist in London and suffered from what The Guardian describes as "traumatic distress", Mr Lu is facing up to much more real day-to-day dangers on the mainland.

After evading the security police who have him under surveillance to drive three hours to a meeting for this interview, Mr Lu said of his ordeal: "I am angry at what happened to me, but not surprised. It is something that cannot be avoided in the struggle for democracy in China. It is a price I have to pay."