HONG KONG, Aug 15 (Reuters) - A Hong Kong court fined 16 Falun Gong members on Thursday for public obstruction and other offences during a protest against Beijing, in a case that has raised fears about personal freedoms here under Chinese rule.

Magistrate Symon Wong could have jailed the members of the group, which is outlawed in mainland China.

But this was the first time that members of the controversial spiritual movement had been prosecuted in Hong Kong, where personal rights under previous laws were retained after China took the territory back from Britain in 1997.

The 16 defendents, including four Swiss, one New Zealander, and two U.S. residents from Hong Kong, remained defiant.

Pumping their clenched fists in the air, they shouted: "We are not guilty! We will not pay a single cent! We will appeal!"

In his verdict, the magistrate said: "The defendants had paid absolutely no regard to the public during the demonstration... The defendants were in open defiance of the laws of Hong Kong."

The court fined each defendant between HK$1,300 and HK$3,800 (US$165-485), well below the maximum penalties, which included jail terms of up to two years.

Political observers say the charges coincided with what appears to be a hardening of resolve by the territory's leader, Tung Chee-Hwa, to get tough on China's critics.

All 16 were found guilty of public obstruction. Nine were also convicted of wilfully obstructing police and three with assaulting police officers. All had pleaded not guilty.

The group was charged after a protest on a wide pavement outside China's main political office in Hong Kong on March 14, when they denounced the crackdown on Falun Gong on the mainland.

RIGHT TO PROTEST "NOT ABSOLUTE"

In his decision, the magistrate said people in Hong Kong had the right to protest and hold demonstrations and he stressed that such rights should be protected.

"But one thing is for sure: these rights are not absolute. They require a very delicate balance, having regard to overall circumstances, such as the time and place," Wong said, adding that the members' actions had been unlawful and unreasonable.

John Clancey, a lawyer for the defendents, told Reuters after the verdict: "If this magistrate is correct, no one can really hold any demonstration in Hong Kong, which is a right protected by the Basic Law (Hong Kong's constitution)."

Hong Kong residents had mixed reactions to the judgment.

"It will threaten freedom of speech, expression and association in Hong Kong," said Chris Lam, a professional in his 20s. "I think everybody should have the freedom of speech, as long as they don't endanger public safety."

But others urged for more faith in the judiciary.

"We have to respect the decision of the judicial system. While Hong Kong people support freedom of speech...the activities of NGOs (non-governmental organisations) have to observe the law. I do believe we should not politicise the case," said Joseph Cheng, politics professor at the City University.

Beijing promised this former British colony a high degree of autonomy after it reverted to Chinese rule in 1997.

The charges against the Falun Gong followers surprised many observers, since Hong Kong officials had been generally tolerant of the group's protests, even after China banned it in 1999.

The group was outlawed after 10,000 members surrounded the Communist Party's sacrosanct leadership compound in Beijing in 1999 in peaceful protest, shocking the Party with its audacity.

Since then, Falun Gong has said over 1,600 followers have died in China as a result of abuse in custody.

China says only a handful have died in custody, mostly from suicide or natural causes, but blames Falun Gong for the deaths of at least 1,900 through suicide, or refusing medical treatment.

Falun Gong, led by reclusive Chinese exile Li Hongzhi in the United States, fuses meditative exercises from Chinese Taichi callisthenics with elements of Taoism and Buddhism.

The group says the verdict in Hong Kong constitutes persecution by the government under pressure from China.

Magistrate Wong said: "If a group of Taichi practitioners had acted in the same way, the issues before me would be the same."

(US$=HK$7.8) Nampa-Reuters 1043 150802 WEB story ENDS (NAMPA 151047)