Will Montenegro unshackle from Serbia?

The people are bitterly divided as they prepare to vote in referendum on independence for the Balkan state

Is Montenegro a Mafia state ridden by Albanian racketeers, where everything is up for sale and independence will mean severing the people from their Serbian cousins? Or a place of fabulous potential, fatally hobbled by the Serbian placemen who will continue to dominate if they are not thrown out?

Today Montenegrins vote in a referendum on unshackling the state from Serbia. A majority of 55 per cent is needed for the "yes" side to win, and the people are bitterly divided.

In Kolasin, a pretty resort in the middle of this jewel of a state, the issues posed by the referendum are thrashed out in the bars that line the main street. The town is so small - population about 3,000 - that the green mountains rear up at either end of it.

By day the "philosophers" of Kolasin (the stereotyped view of Montenegrins among other southern Slavs is that they are as loquacious as they are idle) debate independence over coffee and Coke and beer. By night, however, they let their fists do the talking. "We've had fights every night for the past 10 days," said Snezhana Nicovic, 21, a bartender in the Dell Mar pub, "and they are getting more violent every night. Friday night the front door was torn off its hinges and windows were broken, and one guy needed hospital treatment." Last night she predicted would be even worse, so the staff were closing the bar at 9pm.

When they pour out of the pubs and cafes they drive wildly round the town, shouting slogans for and against independence, often crashing their cars, she said. But yesterday afternoon, independence enthusiast Luka Bulatovic, 27, was sweetly reasonable. He wore a red sweatshirt, the colour of the pro-independence movement led by 44-year-old Prime Minister Milo Djukanovic, emblazoned with CRNA GORA (Montenegro) and the state's symbol, a double-headed eagle. "I am a Montenegrin, and I will vote for Montenegro, because there is no other state for me," he said.

Luka works in the tourist business, which should be the town's moneyspinner. It is developing fast, but without the anti-independence people in the local government, it would do much better, he believes. He says the number of employees in the town council has ballooned in the past 20 years, but they are more inefficient than ever. "They are afraid of losing their jobs if Montenegro gets independence," he claimed. "The town council employees are the core supporters of union."

One bar along, a journalism student called Daniel Rakocevic, 19, claimed supporters of independence had been bribed to vote for it, while opponents had had their identity documents confiscated so they could not vote. "I hate Djukanovic," he said. "Everything that's happened here is his fault. He's been involved in smuggling, he's building a railway line to Albania, he wants Montenegro to become more like Albania than Serbia." A student in Belgrade, he had come back specially to vote.

But perhaps Montenegro is so beautiful that it doesn't really matter who wins. Five minutes' walk across town, past a sprawling concrete behemoth housing a sports centre, Kolasin's future is already taking shape. Bianca, a resort and spa built by Yugoslavia's Communist authorities decades ago, has been lavishly rebuilt by a British company at a cost of €9m (£6m), and now claims to be Montenegro's finest hotel. The company, Beppler and Jacobson, is on the verge of buying a nearby ski resort.

"To us, frankly, it doesn't matter who wins," said Jim Costa, the American general manager. "People on both sides speak according to rumours, and I believe about 5 per cent of what I hear."