Neither the law nor the fear of police action deterred Shrestha, a 25-year-old who has been arrested four times. She was 19 when her marriage to a shopkeeper ended. Alone and with a baby, she was unable to return to her maternal home. Shrestha started living in a rented room at Sat Dobato. With little education and no skills, jobs were hard to come by and she couldn't scrape enough together to survive on. An old school friend arranged for her to work as a waitress at a dance restaurant for Rs 3,000 a month, barely sufficient for her and the baby. Expenses mounted as the child grew older. He needed to go to school and waitressing wouldn't pay the bills. With no one to turn to, she started to seek clients.

They used to whisper about it till a decade ago. Now, it is an open secret. The street-walkers at dusk along Rani Pokhari, the red light districts, the "cabin" restaurants. Lonely migrant men, women trying to earn enough to feed their children all caught up in Kathmandu Valley's burgeoning urbanisation that is fuelling a buargeoning sex trade.

And as usual, the puritans are pressing for punishing prostitutes. Forgetting that without male clients there would be no sex workers. They call for a ban, knowing fully well how it fosters corruption, exploitation and growth of street mafia. And then there are the activists who are organising sex workers and lobbying for legalisation.

There are an estimated 30,000 women sex workers in Kathmandu Valley. The nature, growth and magnitude of the problem shows that a restrictive environment or punishment will not prevent prostitution, nor will it help women sex workers.

Our month-long investigation showed a large proportion of the women work in organised commercial sex work through various outlets like dance and cabin restaurants, massage parlours and a handful of discos. The police can do little. The law does not allow them to officially arrest them on charges of selling sex. They are charge-sheeted with "disturbing peace and security" under the public offence laws. Deputy Superintendent of Police Binod Singh of the Kathmandu Valley Crime Investigation Branch told us, "We should designate red-light areas otherwise there should be a law to try these women."

A recent raid proved to be an eye-opener even for jaded officers like Singh. Groups of young women plied their trade from organised, well-furnished brothels in uptown addresses in Kuleswor, Balkhu and Anamnagar. The women carried mobile phones, rode scooters or hired taxis, frequented expensive restaurants and lived comfortably. An alleged commercial sex worker who was released due to lack of sufficient evidence claims that the commercial sex workers who entertain only upper-class clients can afford cars and houses of their own. Prasai, a 21-year-old from Jhapa now living on her own in Kathmandu, admitted to the police that she shared a flat in Baneswor with other sex workers. The 40-year-old in their midst said she just "managed" while 25-year-old Karki candidly said it was easy money. It challenged old notions that only poor women are prostitutes.

There is no official data on sex workers and studies conducted by activist groups don't tally. The Kathmandu office of the International Labour Organisation says there are 2,650 sex workers in the Valley. Two other NGOs came up with 5,000, while a British researcher estimated that up to 25,000 women are involved in sex work. There is proof that the number of women is far greater than previously assumed. Nepal Police and Health Ministry sources now say there are some 30,000 sex workers in the Valley, and they are not only from the middle and low-income groups. They cut across ethnic and caste groups, geographical regions, and even prostitutes from India and Tibet have been found. But the police have made no in roads into expensive upper class prostitutes who work through five star hotels and casinos, and are rumoured to be politically influential.

Kathmandu's sex workers are trying to get organised and fight for their rights. Last year, they met then health minister Sharat Singh Bhandari to demand legalisation of commercial sex work and creation of red light areas for protection against health risks, physical and economic exploitation. Bhandari gave them a sympathetic hearing and got sucked into controversy himself for advocating legalisation.

Nepali law is silent about sex work and rights over individual's sexual preferences. There are contradictions between state policy and society's mores that will not easily allow commercial sex to be recognised as an occupation. Nepali courts have already set a precedent that two consenting adults can have sexual encounters or give birth to a baby outside wedlock. It also established that commercial sex should be recognised as an occupation. A bench headed by Chief Justice Kedar Nath Upadhaya said selling sex was an occupation, whether it is legally recognised or not. The May 2001 verdict also stated that the article 12 (2) of the Constitution granted citizens the right of freedom to carry out an occupation, employment, industry or trade unless a law stops it on the grounds that that such activity threatens public health or morality.

However, conservative parliamentarians last year demanded that commercial sex should be penalised with a strict law, a move that could have been a populist morality card to wave at voters. In March 2002, the Lower House overwhelmingly voted for a law that penalised those involved in voluntary sex work as well as those who coerce somebody into commercial sex. Both face prison for three to five years and a fine up to Rs 100,000. This law was annulled with the dismissal of parliament in May 2002.

The present legal confusion-neither recognising nor penalising sex work-has compelled police to take action against prostitutes they come across on the streets. DSP Binod Singh believes the solution lies in programs to reform society. "A moralistic state is not the answer," he says. If punishment were the answer, the number of sex workers would have gone down with arrests.

What is worrying is that nearly 20 percent of sex workers surveryed last year in Kathmandu tested positive for HIV/AIDS. There is a deadly nexus between unprotected commercial sex and injecting drug use in Nepal. Many prostitutes are also drug addicts and vice versa, and the clients of sex workers are transmitting the virus into the general population. More than half a sample group of injecting drug users in Kathmandu recently tested positive for HIV.

"Stricter laws against commercial sex trade can have a backlash," warns former health minister Sharat Singh Bhandari, who is credited with having done more for legalising sex work and combatting AIDS than most other officials. "The state should realise that there is a vast difference between those who take up the trade voluntarily and those who are coerced into selling sex," Bhandari told us. "The problem won't disappear if we ignore it."