  We consider the weakly first order phase transition between the isotropic and
ordered phases of nematics in terms of the behavior of topological line
defects. Analytical and Monte Carlo results are presented for a new
coarse-grained lattice theory of nematics which incorporates nematic inversion
symmetry as a local gauge invariance. The nematic-isotropic transition becomes
more weakly first order as disclination core energy is increased, eventually
splitting into two continuous transitions involving the unbinding and
condensation of defects, respectively. These transitions are shown to be in the
Ising and Heisenberg universality classes. A novel isotropic phase with
topological order occurs between them.
