John Redwood, the Secretary of State for Wales, must decide whether to grant one of the leading tepee dwellers, Brig Oubridge, formerly of Brentford, west London, a certificate of lawful use, allowing him to remain in his canvas home.
If this test case goes against Mr Oubridge, it will remove the final barrier to council eviction of the villagers and lead to the demolition of the United Kingdom's oldest ecological housing project.
Last week, after the local Dinefwr council had twice refused him a permit, Mr Oubridge appealed to a special planning inquiry, the results of which will go to the Welsh Office, where John Redwood - one of the Cabinet's leading right-wingers - must decide the village's fate.
Tepee Valley was established in 1976, when a local farmer agreed to sell small parcels of land to pop festival-goers hoping to establish an eco- friendly alternative lifestyle.
There are now some 250 villagers including a practising Anglican minister, the Rev Richard Mayles, former company directors, ex-farmers and a steelworker from Port Talbot.
The villagers grow most of their food, fertilising the soil with their own sewage. The tepees are based on the Sioux Indian shelters of the American plains, although canvas rather than buffalo hide is used, so as not to inflame the passions of Welsh animal rights activists.
There are more than 40 families living in the village and children go to local schools. Many have put up tepees as an alternative to homelessness in Bristol, Cardiff and London. Villagers boast that they are virtually the only people in Wales to live a fully "green" lifestyle that uses little energy and protects the land.
Although the village has been a place of pilgrimage for green activists from as far afield as Japan, India and Sweden, many locals are tepee-unfriendly. The regional branch of the National Farmers' Union describes the village as wholly alien, a blot on the rural landscape which is deeply resented.
Members of the local Llanfynydd village council have long complained of the risks of poor sanitation, disease, sheep worrying, the absence of proper water supply and the threat to local property prices.
In turn, the district council is implacably hostile to what it sees as a flagrant breach of its planning authority by the villagers.
Mr Oubridge, a prominent member of the Welsh Green Party, who helped sew together an agreement to elect a Green/Plaid Cymru MP for North Pembroke, Cynog Dafis, rejects such charges.
The National Rivers Authority, he insists, regularly tests the water, and villagers' sewage is safely composted. "We have been given a completely clean bill of health," he said.
Complaints about sheep worrying have slumped after villagers agreed to restrict dog ownership drastically. Mr Oubridge has brought up two sons, Paul and Kevin , as a single parent and believes that tepee life has proved ideal for his family.
Villagers believed that because their structures were mobile, planning permission was unnecessary.
But in 1984 the Dinefwr district council started moves to evict the villagers, arguing that the villagers had changed the use of the land from agricultural to residential without going through the appropriate procedures.
In 1985, a public inquiry insisted that the villagers must leave or be evicted. Appeals against this decision have dragged but now a final ruling under the Town and Country Planning Act has to be made by the Welsh Office.
An amendment to the act in 1991 states that if a breach of planning law continues for more than 10 years, a certificate of lawful use can be obtained.
Such certificates would allow the villagers to continue their lifestyle.
Mr Oubridge, having exhausted all other appeals, believes having lived in the Tepee Village for 16 years he clearly qualifies for a certificate.
But the district council claims there have been absences in his residence and have twice refused him one.
According to Mr Oubridge, the council "really looked very hard for a quibble . . . they know perfectly well I have lived on this land for more than the necessary 10 years."
Last week his appeal was heard by an inspector from the Welsh Office.
If a Certificate of Lawful Use is granted, a flood of applications from long-standing villagers will follow and the council will be unable to dismantle the tepees.
Mr Oubridge is increasingly nervous about Mr Redwood's likely response.
Yet it is difficult to see Mr Redwood, already in trouble with green activists for planning to privatise parts of the Snowdonia National Park and cut the budget of the Countryside Commission for Wales, as a sure saviour of tepee village.
The long-standing hostility of the Government to travellers and others leading alternative lifestyles is leading to fears that given the complexity of the case, Mr Redwood will refuse to provide a certificate.
The Welsh Office was unavailable for comment.Reuse content