Almost 17 years ago, a toxic cloud drifted from the Union Carbide pesticide plant here, turning the air lethal and the leaves black. It killed seven members of Verma's family, including his parents, and he still lives in fear of demons he cannot see.

"I hear sounds in my mind," Verma said through an interpreter. "I only feel like staying in a lonely room. I can't stand going into a crowd." Verma is a patient at a clinic for survivors opened five years ago by a charity called the Sabhavna Trust. Up to 100 patients come to the two-story building every day for treatment of chronic lung ailments, eye problems, psychiatric disorders and other illnesses common among Bhopal victims.

Satinath Sarangi, a metallurgical engineer who manages the trust, rushed to Bhopal after hearing the first radio reports about the disaster in 1984. He made Bhopal his adopted home, its survivors his extended family and, through it all, became a determined campaigner against economic globalization.

He sees Bhopal not as a tragedy in one act but part of a dangerous trend that continues to play itself out across the developing world.

"We call it the curtain-raiser," Sarangi said.

To Sarangi, and the like-minded who protest with him in the streets of richer nations, the lessons of Bhopal have been lost on governments of the developing world. Those countries are paying a high price, he says, as they try to balance the need for jobs against the pressures of foreign investment, often in hazardous industries considered too dirty--and risky--for more developed nations.

While Bhopal's survivors try to live with the medical fallout of a long-ago disaster, thousands of them also are fighting in U.S. and Indian courts for damages.

Tribunals set up by India's government to settle claims are attempting to close the books on Bhopal this year, amid widespread accusations of corruption. Victims complain that compensation payments, averaging about $580 each, cannot even cover loans many took out to pay medical bills, funeral costs and other expenses.

Tribunal authorities say they were inundated with false claims. But activists suspect India's government is keeping payouts to the bare minimum so that foreign investors will see that cheap labor comes with a bonus: low liability for industrial accidents.

As if that weren't enough, no one has yet decided who will clean up toxic waste that environmental groups say is still seeping into drinking water from the ghostly ruins of the abandoned pesticide plant. And even now, no one is certain whether the disaster was caused by negligence or, as Union Carbide insists, was an act of sabotage by an unhappy worker.

A new day had just begun on Dec. 3, 1984, when a runaway reaction overheated a holding tank of highly toxic methyl isocyanate. It spewed out a poisonous cloud that the moist night air transformed into a swirling chemical vapor of at least 65 gases, including hydrogen cyanide.

The cloud of toxins crept close to the ground and enshrouded people as they lay in their beds or tried to outrun the gas, burning their eyes, throats and lungs.

Verma was sleeping on the floor with four brothers, four sisters and their mother and father when the gas seeped into every corner of their crowded slum around 1 a.m.

Within hours, at least 2,000 people were dead. Nearly 600,000 have received compensation for injuries, either from the initial leak or its aftereffects.

Years later, the official death toll is more than 5,000, but activists say the number of deaths from gas-related illnesses is closer to 20,000. And a few hundred thousand survivors are still fighting the noxious legacy of the world's worst industrial disaster.

They are trying to sue Union Carbide in the United States despite the company's $470-million out-of-court settlement with the Indian government in February 1989.

India's Supreme Court said the settlement was better than the victims could have received under local law. But by keeping the claims out of U.S. courts, the deal also forced the tens of thousands of unsatisfied claimants to search for justice in the crooked maze of India's judicial system.

More than 1 million people, almost double Bhopal's estimated population at the time of the gas leak, filed claims with the local tribunals created by the federal government to decide compensation. The tribunals rejected almost half. The average payout to almost 560,000 survivors who received settlements as of June 1 was $580, official figures show.

That's much less than a year's starting salary for the lowliest of government workers, the messenger who delivers everything from memos to tea and is officially known as a peon. India's government set compensation limits based on incomes from the 1980s, even though the first payments were not made until almost a decade after the leak.

The government still is sitting on a large chunk of Union Carbide's original payout, plus interest, and it refuses to say how much of the money is left. But the figure is estimated to be at least $240 million, said Srinivasan Muralidhar, a lawyer who has represented Bhopal victims in Indian Supreme Court appeals for almost seven years.

In a country where public servants from the letter carrier on up are chronically on the take, the victims are naturally suspicious about what the government is doing with their money.

"It's unpardonable, particularly since they continue to settle claims more than 16 years after the event, and not one of the victims has earned interest on the award," Muralidhar said.

The tribunals approved payments in 14,824 claims for deaths blamed on the disaster, most of which occurred years after. The average compensation was about $1,300, or about 15% of the maximum allowed.

Most of the death settlements were low because the tribunals reduced the majority to injury cases, Sarangi said. The tribunals settled more than 90% of claims for about $550 each, the smallest payment allowed under guidelines the federal government set in 1993, when the tribunals began processing claims.

Abdul Jabbar, now a hard-line Bhopal activist, was living with his family about a mile from the pesticide plant on the night of the leak. His father, Abdul Sattar, died less than two years later. His brother, Munne Khan, died in 1996.

Both succumbed to lung ailments, said Jabbar, who has fibrosis in one lung and can't breathe properly.

The claims tribunal paid about $1,300 for his brother's death and about $550 for his father's, he said. The money went to his widowed mother.

The tribunal is offering Jabbar about $550 for his own suffering, but he refuses it and is among the thousands of survivors fighting in Indian and U.S. courts for more. Their lawyers are arguing, for instance, that the victims have a right to sue in the U.S. for compensation and a cleanup of pollution that endangers the health of up to 20,000 people in Bhopal. A U.S. appeals court heard the case this spring and is expected to rule this year.

"When I'm alone, I feel like tearing my hair out," Jabbar said. "There's one disaster after another. It's only happening because the affected people are poor people."

An investigation ordered by India's Supreme Court in 1995 found evidence that some tribunal officials were demanding bribes from the gas victims. It also concluded that the system was intimidating claimants into accepting the smallest settlements allowed.

Justice Subash Balwant Sakrikar, who heads the tribunals as welfare commissioner of Madhya Pradesh state, denied that the system is flawed. "There are so many complaints, and in most of the cases these complaints are bogus," the judge said in an interview.

Sakrikar said he couldn't discuss details of the complaints or the settlements because matters still are before the courts. But in a written reply to the Supreme Court's 1995 probe, the welfare commissioner's office confirmed that it had fired 12 tribunal staff members for misbehavior, such as demanding bribes from gas victims pleading for higher compensation.

From the start, the Bhopal victims have argued that Union Carbide Corp. should be held accountable in a U.S. court because, they say, the Connecticut-based company designed and built the Bhopal plant, had strict control over its operations and finances and owned a controlling share in its subsidiary, Union Carbide India Ltd.

But a U.S. District Court judge ruled in 1986 that the lawsuit was a matter for India's courts. A U.S. appeals court upheld the decision in 1987, ruling that Union Carbide's Indian subsidiary was a separate and independent legal entity, managed and operated by Indians.

Union Carbide sold its 50.9% share of the subsidiary in 1994 to a Calcutta-based firm. Union Carbide merged with Dow Chemical Co. in February of this year.

Ram Kuwar Bai, 80, received the minimum payout in death cases of 100,000 rupees--about $2,200--in 1994 for the death of her husband, Devi Ram. She split it with her four daughters. Today, Bai has no money left to pay a 3-year-old electric bill of about $380.

She is nearly deaf and blind and dying alone, in a room just big enough for her bed. Her home is in a government-built "widows colony" where gas survivors live amid raw sewage that spills into the streets from leaky pipes.

"I'm running out of breath," she apologized after coughing so hard she had to spit into the hole in the floor that is her toilet. "I'm just waiting for God to come and take me away. Instead of living like this, it's better to die."

The tribunals also paid about $2,200 for each of Sunil Verma's seven relatives, even though the panels' own guidelines allowed a payout four times larger.

Verma spent his share to make a down payment on a bus. He was trying to start a business, but it quickly went bust.

A doctor has diagnosed him as suffering from paranoid psychosis. There is no medical proof that it was caused by the gas leak, but survivors frequently complain of depression, memory loss, panic attacks and other psychiatric disorders, according to studies by the Indian Council of Medical Research.

Dr. Ashok Bhiman found twice as many cases of "organic brain damage" in an area of severe exposure to the toxic gas than he did in an unaffected district. He concluded that the leaked gas caused brain damage, but the government pulled the plug on Bhiman's study and other research on long-term effects six years ago.

The research, including studies into suspected links to birth defects, psychiatric problems and other ailments, was shut down without publication of its results. There was no official explanation.

In the years just after the leak, before Bhopal joined the list of vaguely remembered calamities, the focus was on getting justice for the dead and injured. Few paid much attention to the toxic mess experts say still poisons people.

Today the plant is a rusting hulk of ruptured tanks and empty buildings with broken windows. In the drains, rainwater mixes with contaminated sediments that contain, among other things, mercury. Exposure to high levels of mercury can cause nervous system damage, mood and personality shifts and birth defects, the U.S. Environmental Protection Agency warns.

A large sign in the middle of the deserted complex says: "Not For Sale." Graffiti sprayed in white paint on the wall surrounding the property declare, next to a skull and crossbones, "Union Carbide Killers."

Environmental groups such as Greenpeace say the company left behind an oozing industrial sore. Although it was partially cleaned up in 1996, the plant continues to poison the ground water that runs to hand pumps in the same slums that suffered the brunt of the 1984 gas leak.

In a 1999 study of soil and water samples in and around the plant, scientists from the Greenpeace Research Laboratories at Britain's University of Exeter found "overall contamination" and "hot spots of severe contamination with heavy metals and/or persistent organic pollutants."

The list includes an organochlorine that is a potent kidney toxin and suspected carcinogen, and carbon tetrachloride at levels 1,700 times above the World Health Organization's limit for drinking water. Short-term exposure to carbon tetrachloride may cause liver, kidney and lung damage and long term may cause cancer, according to the EPA.

The pollution is "likely to have serious consequences for the health and survival of the local population," the 109-page Greenpeace report concluded.

Despite earlier environmental warnings, the state Pollution Control Board declared the dump site next to the Bhopal plant "a secure landfill" in 1997. The state government, insisting the land is safe to live on, is offering to return it to farmers who owned it before Union Carbide set up the pesticide plant.

The search for justice isn't just about safety issues and money. The Bhopal victims also want to know who was to blame. Muralidhar, one of their lawyers, says some of the strongest evidence that the plant was accident-prone surfaced just five years ago and, he claims, is still being ignored by India's federal police.

Union Carbide insists that a disgruntled worker caused the Bhopal disaster by connecting a water hose directly to the tank of methyl isocyanate, setting off an unstoppable chemical reaction.

No suspect was ever named, and a study by Indian scientists blamed faults in the plant's design, including insufficient safeguards that they said allowed contaminants into the tank.

But a 1988 investigation conducted for Union Carbide by Arthur D. Little International, a Massachusetts-based consulting firm, concluded "with virtual certainty" that the plant was sabotaged and said "it is equally clear that those most directly involved" tried to cover it up.

Kamal Pareek, who was in charge of plant safety until he quit a year before the gas leak, thinks sabotage was impossible.

"It's so difficult, at any given moment, to consciously release MIC [methyl isocyanate gas] into the atmosphere," Pareek said in an interview in New Delhi, where he now works as a consultant.

The factory had lost so much money since 1981 that safety measures were cut, he said, adding that managers in India and the U.S. ignored many warnings that disaster was inevitable. Separate investigations by Indian scientists and police reached similar conclusions.

A poster left by a leftist workers group on walls near the plant more than two years before the leak warned of danger. It was entered as evidence before India's Supreme Court in a failed 1996 appeal.

In addition, at least one worker was killed and several others injured in a string of phosgene gas leaks that continued at least until 1982, according to reports filed with the Supreme Court. Union Carbide used phosgene, which was a chemical weapon in World War I, to make methyl isocyanate. In 1986, the U.S. government imposed a then-record fine on Union Carbide, alleging safety violations at a pesticide plant in West Virginia; one alleged infraction was that workers checked out suspected phosgene leaks by sniffing equipment vents. Union Carbide denied violating the law but agreed to pay a reduced fine.

Pareek said he had suggested not long before he quit that the company put up its own posters and hand out pamphlets in nearby shantytowns to teach people what to do if a major leak occurred. Management rejected the idea, he said.

Had the messages gone out, people would have learned a simple way to protect themselves: Hold a wet cloth over your face until the deadly gas passes on the wind.

But as it turned out, the victims, most of them asleep, wouldn't have had much warning.

People in the shanties had complained about the noise from Union Carbide's emergency siren, Pareek said.

"The shift superintendent on that night of the disaster decided not to blow the siren," he said, "so that people would not get alarmed unnecessarily, on a very cold night."