  We explore in detail the possibility of intracavity generation of
continuous-variable (CV) entangled states of light beams under mode
phase-locked conditions. We show that such quantum states can be generated in
self-phase locked nondegenerate optical parametric oscillator (NOPO) based on a
type-II phase-matched down-conversion combined with linear mixer of two
orthogonally polarized modes of the subharmonics in a cavity. A quantum theory
of this device, recently realized in the experiment, is developed for both
sub-threshold and above-threshold operational regimes. We show that the system
providing high level phase coherence between two generated modes, unlike to the
ordinary NOPO, also exhibits different types of quantum correlations between
photon numbers and phases of these modes. We quantify the CV entanglement as
two-mode squeezing and show that the maximal degree of the integral two-mode
squeezing(that is 50% relative to the level of vacuum fluctuations) is achieved
at the pump field intensity close to the generation threshold of self-phase
locked NOPO, provided that the constant of linear coupling between the two
polarizations is much less than the mode detunings. The peculiarities of CV
entanglement for the case of unitary, non-dissipative dynamics of the system
under consideration is also cleared up.
