Giles Keyte Cate Blanchett, left, and Judi Dench get nasty in the psychothriller "Notes on a Scandal."

"What was she thinking?" is the trick question -- as well as the subtitle -- of Zoe Heller's novel "Notes on a Scandal." But which "she"? There are two.

		'Notes on a Scandal' Starring: Judi Dench, Cate Blanchett, Bill Nighy Director: Richard Eyre Rating: R for language and some aberrant sexual content Web site: www.foxsearchlight. com/notesonascandal/

We know what one of them -- Barbara -- is thinking: She's the hard-bitten London history teacher (Judi Dench) whose rich cynical voice provides running commentary, derived from the dairies she compulsively keeps. Her subject these days is Sheba (Cate Blanchett), the beautiful new art teacher: fragile, naive, 37-but-looks-much-younger, "with the complexion of a white peach," she confides to her journal.

Barbara finds her totally adorable (even with a foam mustache from her latte) but clueless about handling unruly students like Steven (Andrew Simpson) in class.

"Children are feral, they can sense your anxiety," Barbara counsels, instantly solving Sheba's discipline problem and otherwise ingratiating herself with the younger woman. It's a short step from friend to confidante, their intimacy growing like that of a novice with her mother superior. Indeed, Barbara calls it a "deep spiritual recognition." Others might call it a fatal attraction.

But far more fatal is Sheba's attraction to that rosy-cheeked sexpot Steven, with a 15-year-old's freckles and flirtations. It turns into a perilously illicit affair, complete with dangerous text messages, threatening her marriage (to much older Bill Nighy), her children (including a son with Down syndrome), and her increasingly crucial relationship with Barbara, who knows all -- and senses an opportunity.

"I could gain everything by doing nothing," she muses, thereby assuring Sheba's undying allegiance and affection. In lieu of which, she could always blow the whistle.

"No one can violate our magnificent complicity," says Barbara -- except the love object herself. In the film's most electric scene, Sheba's Choice is as traumatic as Sophie's: Barbara's dying cat or her son's school play? Either way, the scandalous genie comes out of the bottle.

Director Richard Eyre, maker of the underrated "Stage Beauty" (2004) with Billy Crudup and Claire Danes, captures the cat-and-mouse crime and punishment of a nasty little psychothriller that is briskly motivated by the character flaws of protagonist and antagonist alike. Eyre accents and propels key moments with superb Philip Glass music.

Dame Dench dazzles as diabolical, yet somehow semi-empathetic -- so painfully plain sans lipstick and makeup, her gray roots showing, her frumpy tweeds so unflattering -- until she gets a casual invitation from Sheba to come over for lasagna to meet the family. On that chaotic occasion (and reconnaissance mission), Barbara has a makeover and a revelation: "She's the one worth waiting for."

Blanchett's startled-deer vulnerability and insecurities are truly seductive, as is her performance. But this isn't really about lascivious lesbianism. It's about majestic manipulation.

(Speaking of their majesties -- Dench and Helen Mirren -- in case of a tie between them in the Oscar voting, I have an excellent run-off idea for determining the winner: A quick pair of switcheroo-remakes in which Mirren plays Barbara and Dench does QE2. Tell me you wouldn't pay money to see those, huh?)

OK. Meanwhile, Patrick Marber's "Scandal" screenplay at hand is excellent almost -- but not quite -- all the way. A horde of over-the-top press vultures in the denouement makes Princess Di's paparazzi look pale. And Heller purists should be forewarned that the film's ending is radically (if not diametrically) different from the novel's.

So, full circle:

What was she thinking?

That she could get away with it.

Which "she" -- Sheba or Barbara?

Both, of course.