Behind the high red walls of the Zhongnanhai government compound, China's leaders may be gathered in secret conclave to discuss ways to improve their image after Steven Spielberg withdrew as an Olympic adviser. Or they could be discussing how to deal with soaring inflation.

Such is the mystery surrounding Communist Party decision-making that their roll of priorities is not known. Analysts who pore over the political tea leaves and read between the lines of pronouncements in the People's Daily say the Hollywood director may indeed have caused some alarm within those walls.

Mr Spielberg's decision to pull out may have baffled the leadership. Some Politburo members may wonder just who he is, others may question why they should be concerned about a film director and the rest may want to know why Chinese foreign policy is any of his business.

But they all doubtless agree that the Summer Games long heralded as China's debut on to the world stage as rising industrial power rather than impoverished agrarian society must proceed without hitch or controversy.

That may no longer be possible. Darfur is only one of many issues that activists around the world are likely to seize on.

David Zweig, a senior academic in Hong Kong, said Beijing now had to face up to the need for a full-blown public relations policy to deal with a potential wave of bad publicity worldwide. “Will there be spillover from Spielberg? It's possible that there won't be. But there are too many issues on which China is vulnerable.

“They are going to get terrible publicity. This is about international prestige. After all, one purpose of the games was to say to the world 'We have arrived'.”

China's leaders are likely to brush off such comments from artists. These are politicians who have rarely ventured abroad, who wield almost unchallenged power at home and whose main frame of reference for international relations is proper protocol. Nurtured in a one-party system, the leaders are unaccustomed to direct challenges to their authority or dialogue with their peers or their people.

Patrick Horgan, head of the consultancy Apco Worldwide in Beijing, said the inclination would be to try to steer away from confrontation or discussion. “They have known for some time that they faced challenges in this regard. But what is happening this time is on a larger scale, is more organised and more concentrated than on previous occasions. They are not particularly well equipped by experience to handle this.”

China took 36 hours to react to Mr Spielberg's snub. When they did they spoke in unusually conciliatory tones. The question now will be whether they can maintain that patient pitch until August 24.

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