A fire at a resort on Boracay (AFP)

Boracay, with its crystal clear water, white powder sand and constant sunshine, presents itself as a slice of paradise but scratch the surface and the island is seething with discontent.

The bone-shaped, 1,000-hectare (2,470-acre) island in the central Philippines has been transformed in 40 years from a sleepy limestone outcrop without electricity into one of the country's priciest chunks of real estate.

A fifth of the country's tourist traffic, mostly big-spending Americans and Europeans, winter along its 4.5-kilometre (2.8-mile) stretch of pristine beachfront that is drenched in year-round tropical sunshine.

Kite-boarders, sailboats, banana boats, swimmers and scuba-diving parties jostle for space along the clear, turquoise-tinged waters that are a few yards (metres) from hotels, tattoo parlours, bistros and other tourist havens.

But the scramble to secure ownership of some of the most valuable real estate in the country has led to violence including tear gas, fires and allegations of kidnapping, as well as prolonged court action.

Recently a 1.5-hectare (3.6-acre) warren of tourist shops, restaurants and inns was burnt to the ground ending one family's long, legal fight to keep the property they had spent years developing.

The Supreme Court has since awarded the property to a major developer.

Police reported finding "molotov cocktails and an unknown flammable substance" among the ruins --and despite rumours, no one seriously believes, the owners would burn down their own possessions.

Nearby, Australian hotelier Gregory Hutchinson is still barricaded in the top floor of the 6,000-square-metre (1.5-acre) Sand Castles resort after his landlord canceled his lease and seized the ground floor with the help of armed private security.

The glass facade was shattered in the takeover skirmish. No one was hurt but the hotel guests fled, leaving fibreglass kayaks scattered in the yard.

"If these things (property disputes) continue no one in his right mind would want to come and visit this place," Superintendent Arnold Ardiente, police chief of this tourist island told AFP as his men brought food and toiletries upstairs to Hutchinson and his family.

Tourists walk along the fabled beach of Boracay island on November 9, 2008. Philippine government on November 11 rejected allegations it was grabbing land from international investors on Boracay island, saying accounts of resorts being forcibly seized were being exxaggerated. Environment Secretary Lito Atienza said the accounts were merely a land dispute between two parties. (AFP/Getty Images)

"It's not good for the island," Steve Murray, a burly Australian shopkeeper who doubles as his country's consular warden for the area, said of the property disputes.

He has seen a few during his eight-years here, but "many of them are kept quiet" so as not to upset the tourists.

Ardiente said: "There have been several incidents involving land disputes that turned violent. People would shoot at each other and people would die, but all these cases are now in the courts."

The local resort owners' association, called Boracay Foundation, is steering clear of the controversies and refusing to comment.

Still, with the peak tourist season just a month away, the locals are up in arms over a 2006 government edict that declared 40% of the island a forest reserve.

The Supreme Court recently upheld President Gloria Arroyo on the issue, throwing out private claimants' bid to secure legal titles to land on which hundreds of millions of dollars have been sunk into tourist-related building improvements.

Only 10% of the area has land titles, with the rest of the resort owners and residents essentially leasing space by paying real estate taxes.

"While it's not really a major irritant because people have a way of settling these, it has remained an irritant because of the untitled nature of properties here on the island," said Florencio Miraflores, the congressman for the district.

Miraflores, who also owns land here, is pushing a bill that would allow families who have been in Boracay for 30 years to apply for legal titles to their plots.

With Philippine tourist arrivals projected to break through the four million-mark this year despite a global economic slowdown, three top hotel chains are expected to open within a year.

Filipino-American hotelier Ariel Abriam, who is buying up rights to beach-side property here, accepts that, like in Cancun or Waikiki, Boracay businesses would undergo consolidation with only the big players left standing as the tourist destination matures.

"All these little shops on the beachfront are going to disappear. It's just a matter of time," said the ex-US navy man, who spent his pension to build the 30-room Boracay Beach Club hotel that is favoured by Filipino movie stars and retired US servicemen.