By Jeremy Clift

DHARAMSALA, India, July 2 (Reuter) - Penpa Dorjee sits heating black wax on a fire to sculpt a model of his next giant statue. At 65, he is one of only three remaining Tibetan master metalworkers who can design and fabricate the large bronze and copper statues that form the centrepieces of Buddhist monasteries or temples, Tibetan exiles and scholars say.

Now, along with a team of six apprentices, he is working on a 14-foot high statue of Buddha made of beaten copper in the middle of the Norbulingka Institute, established in the foothills of the Himalayas to preserve Tibetan culture in exile. "I fled Tibet in 1963," Dorjee says. "I felt if I stayed in Tibet then everything would be finished. "I decided to preserve my art in exile."

Many of Dorjee's statues were destroyed in Tibet during the 1960s when hundreds of monasteries were pulled down by the Chinese Communists and monks were imprisoned or killed. "I felt very sad inside when I heard that these monasteries had been destroyed. In the beginning I couldn't bear it," said Dorjee, amid the hammering of metal panels for the gleaming statue.

The Norbulingka Institute, named after the summer residence in Tibet of the Seventh Dalai Lama built in 1754, houses three masters of Tibetan arts, including Dorjee, an artist and a master woodworker. They teach 23 students who will carry on the ancient Tibetan traditions while living in exile in India, away from what they believe are the distortions of their art by the Chinese in Tibet.

The institute is a few miles away from where the Tibetan spiritual leader, the Dalai Lama, has formed his government in exile that is pressing for independence from Beijing. The Dalai Lama, who turns 60 this week (July 6), fears that time is running out before Tibet's culture and traditions are eclipsed. He says that with continued Chinese migration, Tibet could end up like Manchuria, which is now fully absorbed into China.

"Then you see one ancient nation with its unique cultural heritage disappear. Of course (there will be) a few Tibetans here and there, among the thousands of Chinese like in Manchuria," he told Reuters in an interview. "Now their culture, their language has completely disappeared. So that kind of situation can happen in Tibet," adds the Dalai Lama, who fled into exile in 1959. The theme is echoed by other Tibetan officials.

"We are losing our own culture and identity," says Kalsang Yulgial, who runs a reception centre in Dharamsala for refugees who have fled from Tibet, or come on a religious pilgrimage to be blessed by the Dalai Lama, who remains widely revered in his homeland. "If the Chinese at this rate go on pouring into Tibet there is every chance that we will be swamped and the Tibetan identity will be lost," says 23-year-old Khenrup, a student at a Tibetan transit school near Dharamsala.

Students cross into India from Tibet and come to the school for a year or two to learn Tibetan culture and traditions, says Khenrup, who says he was imprisoned by the Chinese for two years in the early 1990s for carrying old Tibetan maps. Western interest in religious art can help keep some of the traditions alive, although not all the artists are as conscientious as those at the Norbulingka.

"It won't die out, but it will degenerate for sure," says Kim Yeshi, a project director at the institute who is working to ensure that the correct patterns and designs are followed.She says there's a lot of fake Tibetan art around now. "There's so much demand for religious art that people will pay more money for lower quality," she says. "You find art in the shops with all these deities that don't exist."