Talks aimed at normalising relations between China and the Vatican appear to have suffered a serious setback with Beijing's appointment of yet another bishop without approval of Pope Benedict XVI.
Rome fears the Chinese split may become permanent
The move - which has angered the Pope - also risks further alienating the four million followers of the state-run Chinese Catholic Patriotic Association and the estimated 10m Roman Catholics who practise their religion underground.
The talks were said to have been progressing well. The Vatican had even indicated it was prepared to break off ties with Taiwan, viewed by Beijing as a renegade province - the central condition hampering a formal rapprochement.
The two capitals are fully aware of the relative influence they exercise over the world - as well of the benefits of friendship that could be reaped as a result of renewed ties.
So it is difficult to understand what prompted the latest spat - was it a breakdown of the informal talks that led to the public display of defiance or rather domestic considerations in China that could have a terminal impact on the talks?
The last Roman Catholic emissaries were forced out of China in 1951 - two years after the Communist Party of Mao Zedong seized power and began stamping out religion in the process of implementing the ideology of the new atheist leadership.
Hardship ensued, with churches being demolished and priests and believers persecuted and even tortured - a process culminating with the Cultural revolution of the 1960s.
Mao's death and China's opening in the late 70s brought some relief - Catholics were allowed to worship openly provided they subscribed to the officially sanctioned church and maintained no ties with the Vatican.
The Holy See, in turn, proceeded to infuriate China with its recognition of Taiwan after the 1951 break.
The Vatican is one of a handful of countries to have formally recognised Taipei - and thus broken with Beijing.
To a certain extent China and the Holy See remain political adversaries.
"The bottom line is that the Catholic Church does not like communism, and the Chinese authorities do not like the Church," said Professor Richard Madsen, a specialist in Catholicism in China at the University of California, San Diego.
For the Vatican, a resumption of diplomatic relations with China could be the gateway to controlling one of the fastest-growing Catholic communities in the world.
And while it had been one of the main wishes of the previous Pope, John Paul II, to seek a rapprochement with Beijing, his outspoken views and perceived anti-communist credentials may have undermined these very efforts.
Cardinal Zen is an outspoken advocate of democracy
Analysts saw a chance for a breakthrough after the Pope's death in 2005.
However, the Chinese government insists in refusing to cede control to the Holy See over the appointment of bishops - even though, over the past five years, it had allowed bishops to seek approval from the Pope.
The current row may be a simple expressing of that continued resistance in a leadership that still perceives any organised grouping to be a challenge to its authority.
"One of the biggest growing problems in China is social unrest. The Falun Gong is a relevant example. China sees religion as a binding force in the growth of social movements. It feels a need to be very careful about negotiations with the Vatican," says Beatrice Leung, a Catholic nun and professor of international affairs at the Wenzao Ursuline College of Taiwan.
"The practice of religion especially in rural areas is really flowering in China. This is something the authorities feel they must control. China is acting in the interests of social stability.
"Its intransigent attitude is simply a way of slowing down the rapid process of change."
But others see the public disagreement as a portender of more ominous things to come.
The head of Hong Kong's Roman Catholic Church, Cardinal Joseph Zen, who is considered to have the inside track on talks between China and the Vatican, said: "We cannot continue talking and pretending that nothing has happened. This matter is too serious. "
About 40 Chinese Catholic dioceses are vacant at the moment. The Vatican prefers them to remain that way rather than be occupied by bishops who are not in communion with Rome.
Rome's basic fear is that the split will become permanent.