HUNDREDS OF TIBETANS and Westerners crowded on to the streets of Dharmsala, India, for a glimpse of the Dalai Lama, jostling for a position to make eye contact with His Holiness without falling into the stinking roadside gutters.

Their spiritual leader was returning from a trip to Canada like some jet-setting rock star, and his hillstation home in exile shut down as everyone gathered in excitement outside his palace.

The Tibetans wanted to acquire religious merit by proximity to the living Buddha. The foreigners wanted to spot a big-time celebrity.

Most of the Tibetans were old rheumy-eyed men, in heavy coats and fur hats despite the Himalayan sun beating down, and bent, old women in their best dresses who can remember their homeland before the invasion. The Westerners seemed to think they were at a fancy-dress party, wearing everything from tie-dyed gear to Tibetan nomad outfits bought from refugees in Dharmsala’s flea markets. Several were revolving prayer wheels and earnestly mumbling mantras next to relaxed Tibetan monks who were joking together.

A South African monk and nun in matching maroon robes had found a sect that allowed them to take monastic vows yet live together, and a noisy shaven-headed American nun squeaked with excitement as Tibet’s spiritual leader roared up the hill in his top-of-the-range four-wheel-drive vehicle flashing past in a cloud of dust. Everyone saw him grinning and waving merrily from the front passenger seat.

The few Tibetan youngsters — and there weren’t many — looked strangely out of place in jeans and T-shirts. If you want to see the youth of Dharmsala, you need to go instead to the cafés. There goatee-bearded Tibetans in jeans watch MTV all day, play pool, and laugh at those who choose to go into monasteries rather than spending their energy chasing foreign girls. The bus-stop delivering backpackers is where the young men first pounce. Competition is fierce so women are hit on from the moment they arrive. The success rate is high. Western women love the Red Indian look of the Tibetan men with their manes of black hair, long earrings and heroic stories of escape over the mountains from oppression in China.

This strange dating scene is not what anyone would have predicted when the Dalai Lama fled his homeland for India in 1959, after an uprising in Lhasa was crushed by the Chinese. His Holiness was soon followed by 100,000 refugees. Many settled to be near him, turning Dharmsala from a sleepy Indian hill station into a little Lhasa. Ever since, it has been a kind of Camelot.

His Holiness’s home in exile is where Tibet’s ancient culture could survive in the monasteries and libraries the refugees built, a place of safe-keeping for the texts and statues smuggled across the Himalayas at great risk, and where the flame of Tibetan freedom could be kept burning ready for the longed-for day of return to the homeland. Westerners started turning up in large numbers after the Dalai Lama was awarded the Nobel Peace Prize in 1989.

Tibet is a dream for Westerners in search of a cause. Exotic (what other oppressed people boasts flying lamas and a state oracle who goes into trances and sees the future?), non-violent and, apparently, clear-cut — a peaceful culture destroyed by ruthless colonialists. Their money was a huge boost for a desperate people.

But 15 years later, as the hope of ever returning to the homeland dims, some Tibetans wonder if the foreigners are the latest curse to afflict them. Monasteries seem to do particularly well from foreign devotees, but there are grumblings about an aid-dependency culture sapping the Tibetans’ will. Some complain that foreign money is not shared out. Famous lamas drive around in expensive cars while schools for refugee children are short of everything. Tibetans, generally, like the foreigners, even though they privately joke about the mad “injis”.

Then there’s the cultural dilution caused by the sheer numbers of backpackers: monasteries and Tibetan noodle stands are outnumbered now by internet cafés and Israeli restaurants. Past the row of prayer wheels on the shabby main street are dozens of souvenir stalls and bookshops crammed with ghost-written books by His Holiness. Westerners learn about the history of Tibet from Hollywood: videos of Martin Scorsese’s 1997 film, Kundun, and Jean-Jacques Annaud’ s Seven Years in Tibet, starring Brad Pitt, depicting a romanticised vision of the old Tibet are shown to the backpacker brigade every night in the Tibet Memory café.

Big Hollywood stars are sometimes spotted strolling around town. Richard Gere visits quite often to see his guru, the Dalai Lama, mingling with backpackers. He and Goldie Hawn spent about $1 million on a project to tidy up Dharmsala and sort out the crumbling infrastructure. Last time he was here he complained about how little had been done with his money. But they do have his name displayed prominently on Dharmsala’s only public latrine. Pierce Brosnan has a different memorial — a photo of him tucking into a curry in one of the most popular backpacker restaurants.

Well-heeled meditators from New York or Milan stay in upmarket heritage hotels in the forested hills while their poorer brothers and sisters conduct a spiritual quest from cockroach-infested fleapits. Behind the town is a backdrop of 17,000ft (5,000m) of snow-covered Himalayan mountains, but the littered muddy streets are a mess. Beggars from the Indian cities infest the place, and fake gurus from every sect in the sub-continent have moved in to make a pitch for the New-Age dollar.