HIGHMOUNT - Plans to build a fancy resort here high in the Catskill Mountains next to a bigger, better state-run Belleayre ski center seemed like a snowball rolling downhill this fall.

When Gov. Eliot Spitzer took to a podium in September to announce plans to make the woodsy hills 100 miles northwest of New York City a “ski destination,” he was flanked by people who had spent years tenaciously fighting a larger version of the resort proposal.

But as the compromise plan to build a smaller resort moves ahead, many people in the little towns around the mountain are still fighting it. Critics fear two hotels and a golf course on the mountain would still be too big and disruptive.

“A lot of people thought it was going to be a much smaller project,” said John Carney of Save the Mountain. “People are just cottoning on to what it's about.”

Crossroad Venture's original plan to build a pair of hotels, townhouses and two golf courses near the state's Belleayre Mountain Ski Center had been gummed up for several years when Spitzer took office in January. Conservation groups and New York City environmental officials were concerned that the development would threaten the purity of city reservoirs downhill, particularly the Ashokan Reservoir.

The Spitzer administration brokered a deal for a pared-down proposal designed to balance conservation with economic development - 629 units instead of 772, one golf course instead of two. The hotels would be built under environmentally sensitive guidelines and the golf course would be organic.

The governor also proposed spending about $6.5 million to buy the overgrown Highmount ski center next to Belleayre, enlarging it and linking the public slopes to the private resort.

Crucial to winning the support of environmentalists and New York City was the permanent protection of 1,216 acres upland from the Ashokan Reservoir. Under the deal, the state will buy the land, which is expected to cost around $12 million.

“From a regional standpoint and a water quality standpoint, there is good reason to believe that this agreement, if scrupulously implemented, would be a historic advance in terms of conservation, watershed protection and environmental safeguards,” said Eric Goldstein of the Natural Resources Defense Council, which threw its support behind the project after years of opposition.

There is local support, too. Many here see the resort as their best chance to lure more skiers from the metro area who currently drive by the Catskills on the way to Vermont or the Adirondacks. Sandy Zarcone, taking a break from her job at the Belleayre ski lodge on a recent weekday, said the resort could give daytrippers skiing here a reason to stay.

Proponents say that with New York City buying land in the Catskills as part of a plan to avoid having to spend billions on a water filtration plant, economic development chances here are rare. Zarcone jokes that things are so dead in the nearby town of Fleischmanns there may as well be tumbleweeds rolling down the street.

“In my opinion, the endangered species here is the human species in the Catskills,” said Joseph F. Kelly, chairman of the Coalition for Belleayre. “We'll have the weekend people up from the city but no indigenous people.”

But local opposition remains vigorous. “Save the Mountain” signs are common in front yards here and a recent public comment session at Belleayre about potential environmental issues drew more than 100 people who signed up to speak. State environmental officials had to add another night to accommodate everybody.

Concerns range from clogged roads, to noise, to sketchy details, to whether the state can legally buy the defunct Highmount ski center under the “forever wild” clause of the state constitution.

The modified proposal also has created a rift in the conservation community since a few groups, notably the state chapter of Sierra Club, refused to sign on to the September agreement. Sierra Club's Carolyn Zolas said the development would still threaten the purity of New York City's water.

“We'll fight it as much as we can,” Zolas said.

The bigger rift is among the local residents. Each side believes they are in the majority. Talks with residents approached on the snowy streets of the local towns revealed support the project. Still, the anti-development lawn signs seem to outnumber the “More Jobs - Less Taxes” signs and the November elections in Shandaken resulted in a big win for candidates who want more scrutiny of the project.

Opponents will have their work cut out for them as the supplemental draft environmental impact statement comes under review in 2008. While Judith Wyman of Friends of Catskill Park said her group would participate in “every step” of the process, opponents have lost some allies this fall.

“It has divided the community,” Kelly said. “That's the toughest part about this.”