KEY WEST – Christy Sweet, a 42-year-old lap dancer with a college girl’s body, never dreamed that a wave of prudishness could shutter her erotic-dance parlor, in this of all cities.

This is the city where, during the annual bacchanalia known as Fantasy Fest, schoolgirls and grandmas make canvasses out of their bare chests and 60-year-old men saunter about with spray-on thongs. Where clothing-optional inns, bars, restaurants and topless charter fishing outfits flourish. Where the Girls Gone Wild knockoff, Real Wild Girls, filmed enough collegiate vice to fill two video volumes.

”This is a town known for its debauchery,” said Sweet, whose fight against City Hall to keep her tiny storefront Personal Dances parlor open is being heard in federal court. “Hell, it’s a pirate town. It’s always been about rape and pillage.”

But a move toward modesty — and moderation — is gripping Key West, a city caught in a three-way tug of war among the wants of residents, tourists and businesses. In recent months, vans bearing images of bikini-clad girls advertising a strip club were stopped from driving around town; clothing-optional restaurants staffed by bare-breasted bartenders were cited by code enforcers; and, most notable, the city attorney began to revamp a local law eventually to rid most of the city of strip clubs and XXX video stores.

”This is Key West, not New York City,” the city attorney, Bob Tischenkel, said.

Key West cannot ban strip clubs and the like outright. Nude dancing and other adult entertainment are protected under the First Amendment.

So Tischenkel is seeking to limit strip clubs and adult merchandise vendors to a zoned handful of blocks downtown.

Under the proposed law, still under review, licenses held by the seven so-called adult entertainment businesses beyond the borders of a Lower Duval zone would die with those businesses, and not be transferred or sold. Racy adult shops and clubs in the zone, about a half-dozen now, would hand over their licenses when their business died, and a lottery would pass the license to the next taker.

The proposed law would not force adult shops to close but would prevent new ones from opening and let time weed most of them out.

For Sweet, along with a few other adult-business owners and City Commissioner Tom Oosterhoudt, the ordinance is symptomatic of a conservative trend taking hold of the city, ushered in by new waves of increasingly moneyed residents.

”It’s getting to be this retirement city with this gentrification, which I hate,” Oosterhoudt said. “Key West has been such a laid-back, wild, wild West town.”

But other city officials and resident activists say that limits must be set on this two-by-four-mile island, where tourists come to escape but families live year round. Even some local adult-business owners support the proposed law.

”They don’t want overgrowth. It’s a respectful, honorable thing to ask,” said Buddy Dyess, co-owner of Leather Master, a store off Duval Street that sells fetish wear and pricey paddles.

Tischenkel was compelled to revamp the city’s adult entertainment law after residents and business owners protested a proposed adult entertainment complex on upper Duval Street, home to art galleries and high-end restaurants.

”I just didn’t think it was the right thing for our neighborhood,” said Nancy Coward, an inn owner who fought the development.

City Commissioner Carmen Turner, who represents Coward’s area, said she took up the residents’ battle partly out of a sense of responsibility to her girlhood memories of the city.

”I’m looking at the whole metamorphosis this town has gone through, and I’m dismayed by the image that we’re projecting to the world,” Turner said. “I just can’t stand by and let that happen. Things that happen during Fantasy Fest do not demonstrate who we are as a community.”

But Tischenkel must prove that the revamped ordinance does not trample on First Amendment rights. Early signs indicate that trouble might be ahead. Two weeks ago, U.S. Magistrate John J. O’Sullivan sided with Sweet’s claim that the city’s existing ordinance, which was used to close her business, is unconstitutional.

The city granted Sweet a license to set up shop on July 4, 2002, but revoked it last January after resident activist Elliot Baron noted that it violated the city’s adult entertainment law, which bans such businesses from opening within 200 feet of a school, church or bar.

But the magistrate said the loss of Sweet’s First Amendment rights ”outweighs any potential harm to the city.” Sweet has since reopened her dance shop.

Tischenkel is crafting the revamped ordinance with updated case law in the hope that it can withstand future constitutional challenges. He expects the City Commission to pass the law by summer’s end.

Nudists can relax. Clothing-optional inns, restaurants and bars are not considered adult entertainment businesses, although code enforcers did cite one cafe, Naked Lunch, because staffers were nude from the waist up.

”Sunbathing is not an issue,” Tischenkel said. “But the waitresses were topless. Is there a sexual component to that?”