Paris — This country that loves to demonstrate has just seen one of its biggest rallies ever. It echoed the great church-state battles of the 19th century. Amid a sea of banners saying, ''Let our free schools live'' and ''Our taxes for our children,'' more than half a million people descended on Louis XIV's chateau in Versailles. Last Sunday's protest climaxed a month-long, nationwide campaign denouncing the Socialist government's plans to revise the status of the country's 10,000 private schools, most of them Roman Catholic.
But the renewed warfare between church and state over control of schools is not confined to France. Throughout southern Europe, socialist governments are battling to reduce the Catholic Church's power by loosening its control over education.
In Italy, Prime Minister Bettino Craxi recently revised the country's Concordat with the Vatican, stripping Catholicism of its position as Italy's official religion. Parents no longer must ask for a child to be exempted from religious education. Instead such education will now be offered only if requested.
The change does not threaten the status of Roman Catholic private schools, and it has not provoked widespread public discontent. But many Catholic educators are grumbling that religion will now be ostracized from the schools.
Spain's Socialist government faces stronger opposition in its attempts to cut state subsidies to church schools and end mandatory religious education. About 150,000 protesters jammed Madrid two weeks ago. In parliament, the Conservative Party is filibustering the reform with 4,160 amendments that fill seven large boxes and weigh five kilograms (11 pounds).
Yet the most heated church-state struggle is taking place in France, the most modern and least religious of the three countries. Socialist President Francois Mitterrand is walking a political tightrope. He cannot afford to alienate the masses who marched in Versailles. At the same time, he must satisfy his Socialist militants, many of them teachers, who say the state has no business funding religious schools.
The struggle between religious and secular schools dates from the 19th century and has always symbolized France's cleavage between right and left. Only such heavy history can explain why it continues to ignite fierce passions.
Catholic priests monopolized primary education until 1880. Then, armed with the slogan of ecole libre, or free school, the left succeeded in creating free, compulsory public schools.
Jules Ferry, the powerful radical premier, banned Catholic schools entirely in 1901, though subsequent Third Republic governments allowed them to reopen. Steadily the parish institutions grew stronger, particularly since 1959, when President Charles de Gaulle passed a law assuring the schools of government funding if they adhered to the minimal requirements of the state curriculum.
Today, the church schools educate about 1 in 6 of France's 12 million pupils. In deeply religious areas such as Brittany, they are often the only schools available.
Francois Mitterrand has opposed the 1959 law, vowing to change the system if he came to power. During his 1981 election campaign, he pledged to incorporate religious schools into a ''large, unified, and lay public service.''
After his victory, he proposed to increase government control over the religious schools. The Catholic backlash was immediate. ''Save the schools'' rallies began.
Not wanting a political spectacle, in 1982 Mitterrand opened negotiations with Catholic school representatives. Instead of shutting down the religious schools, he proposed only to appoint government administrators and establish nationwide qualification standards for teachers.
The church was not appeased, however, and the talks stalemated. Finally, under pressure from its militants, Mitterrand set an informal deadline of this spring for change.
The Catholics again responded by calling out their troops - this time with even greater success, as the Versailles march illustrates. Undoubtedly, the Catholic cause is popular. Polls show that nearly 70 percent of French families want to retain the choice to send their children to private school.
This choice often is not religiously motivated. In fact, polls show that religious observance has fallen by one-third in the last decade. But as in the United States, many supporters of Catholic schools argue that the private institutions provide higher educational standards and tighter discipline than public schools.
The net result has been a political disaster for Mitterrand. No longer does the left look progressive arguing for ''free schools.'' Now it is the Catholics - and conservative politicians - who argue that their schools ensured freedom of choice.
Jacques Chirac, neo-Gaullist leader and mayor of Paris, for example, said the reform would ''lead to the suppression'' of a ''fundamental liberty in this country.''
Suggesting that a national referendum be called, he denounced ''the hold of the Socialist-Communist coalition over the brains of our children.''
Meanwhile, the government's stiff austerity program is running into angry opposition from a broad array of interest groups.
Last week, coal miners marched through Paris to dramatize their opposition to cutbacks in state subsidies.
Thursday the 3.5 million public service employees stalled rail, subway, and air traffic as they struck for a day demanding cost-of-living increases. And with the image of their paralyzing roadblocks still fresh, the testy truckers resumed their negotiations with the government over tax breaks on diesel fuel.
In response to these pressures, the government tried to calm the school war. Mitterrand wrote a conciliatory letter to rightist senators. Some influential Socialists, including party leader Lionel Jospin, even suggested postponing the school reform debate beyond parliament's spring session.
''One has to take into account of the demonstrations, past and future,'' Mr. Jospin said last week. ''Since the government has priority objectives on the social and economic front, it should concentrate on those issues.''
But it is unclear whether the government will heed this advice. Jospin is not a member of the government, and Mitterrand cannot postpone the debate without risking the wrath of the secular school movement - itself capable of mustering several hundred thousand demonstrators in the past.
''An eventual retreat by the government on this problem could ultimately lead the left out of power,'' warned Michel Bouchareissas, general secretary of the National Lay Action Committee. ''It would lose the support of its most active militant campaigners.''