With an architectural history that dates back 1,000 years, Prague has one of the few perfectly preserved city centers in the world, and the plans to redraw its surrounding skyline have set off perhaps the most passionate clash over preservation in Eastern and Central Europe. As some of the newest members of the European Union, the Czech Republic, Hungary, Poland and the Baltic states have all enjoyed booming economies, in which developers insist that old (sometimes historic) buildings need to make way for the demands of an increasingly rich populace and work force. But to conservationists, the Czech twin towers and other new buildings represent an unwelcome “Manhattanization of Prague,” and a self-defeating threat to Old Town, the main draw of a tourism industry that accounts for 10 percent of the Czech economy. “If we allow such tall skyscrapers, there will be no turning back,” frets Richard Biegel, executive director of the Club for Old Prague, a preservation lobby. “These tower blocks will destroy the skyline and change the city forever.”

Prague is at the heart of these battles because its economic transformation has been particularly sweeping, and its Old Town is among the largest and best preserved in Europe. The neighborhood, which covers 866 hectares, and surrounding areas are already dotted with modern construction and remodeling, with glittering glass structures extending the height of historic buildings, and baroque façades redone in glass and metal. Yet the pace of development is a step behind demand for space in a city that, with its location near the markets of Germany, Austria and Poland, has attracted the regional headquarters of multinationals like Sun Microsystems and Hewlett-Packard. Commercial vacancy rates are 5.5 percent, half the European Union average.

Developers are now turning a 19th-century military barracks on the edge of Old Town into a massive mall. They gutted the inside but retained the exterior, painting it a garish pink. This clashes dramatically with the art nouveau Municipal House, one of Prague’s most beautiful buildings, located across the street. But so far there has been little political will to stop projects like this. Last year the city fined a hotel developer for destroying architectural features inside two baroque palaces that date back to the 14th and 15th centuries. Yet the maximum fine for such an offense is a mere $5,000. City officials also initially approved the construction of the V-shaped tower, arguing its presence would improve the look of a neighborhood now filled with ugly communist-era buildings. When residents objected earlier this year, the city referred the plan to the Czech Culture Ministry, where it awaits a decision.

Conservationists say that, unlike other cities, Prague lacks a clear policy on development, with new projects considered by city officials on a case-by-case basis. One suggestion, already successful in Paris, has been to at least limit the construction of skyscrapers to the edge of town. Another idea is to blend the new more fluidly into the old, aiming to create modern buildings that are an attraction on their own (think I. M. Pei’s pyramid at the Louvre). The quirky, curved glass Dancing House—a.k.a. the Fred and Ginger Building, designed by Vlado Milunic and Frank Gehry—was built during the mid-1990s to widespread derision. But the office building, with a luxury restaurant on the top floor, fits the scale of the surrounding buildings and is located just outside the city center, placating even many people who were once against it.

Still, other buildings could be considered poor fits. Jan Kaplicky—a London architect born in Prague, and known for amorphous buildings that appear to be devoid of angles—designed Prague’s new National Library, a $160 million, 40,000-square-meter structure set atop a white, unpolished marble platform. When it is completed in 2011, its exterior will be covered with champagne-colored aluminum tiles that fade from dark at the bottom to light at the top. Kaplicky says its unusual curvature is a reference to the city’s baroque buildings, and argues that “it would be a huge mistake to turn Prague into a museum.” True, but the recently unveiled design for the building resembles a massive jellyfish, sparking still more controversy in the City of 100 Spires.