Organized crime, newly arrogant and powerful, is confronting Italy with its greatest challenge since Fascism - and jolting this country into a tough response unheard of since the days of Benito Mussolini.
''The Mafia has challenged the state, and the sovereignty of the republic is at stake,'' says Italian Prime Minister Giovanni Spadolini. His words express the feelings of alarm and emergency that permeate this country today as Italians , weary after the decade-long battle against Red Brigade terrorism, also begin to realize the growing strength and influence of organized crime.
No longer is the Mafia simply an entrenched system of regional patronage and local crime. During the past decade it has shifted from protection rackets into a multibillion dollar international business based largely on the drug trade.
The Mafia's accumulating wealth has unleashed brutal gang wars with murders and killings in the hundreds. It has percolated through the nation's banking system. With increasing confidence, the Mafiosi have exploited the weaknesses of national institutions already undermined by years of corruption and political stagnation.
Last week's murder of Italy's top anti-Mafia fighter, Gen. Carlo Alberto Dalla Chiesa, brought Italian anxieties bubbling to the surface. He and his young wife were gunned down in Sicily, the Mafia stronghold, only four months after he was sent there to clean the region up.
After directing a string of successful antiterrorist raids, including the rescue of US Gen. James L. Dozier, Mr. Dalla Chiesa was known for his efficiency. His reputation cut across party lines. As Sicily's new regional prefect, he was the highest representative of the Rome government. His murder is seen here as an attack against the heart of the state, the worst since the slaying of former Prime Minister Aldo Moro four years ago.
Special powers to combat organized crime were promptly granted to Dalla Chiesa's successor, Emanuele de Francesco, who also remains head of the country's secret services.
Parliament speedily approved the new legislation. For the first time membership in a Mafia clan is a crime. Investigators are given unprecedented powers to explore suspects' sources of wealth and influence. The estates of suspects or their relatives can be confiscated if they can't show the legitimacy of their provenance.
Not since Mussolini sent Cesare Mori, the ''Iron Prefect,'' to Sicily to curb the rural Mafia has the state defended itself with such tough legislation.
The country's alarm was triggered by the sudden revelation of the extent of organized crime's power and influence. According to sociologist and leading Mafia expert Pino Arlacchi, the ''honored society'' has shifted its emphasis from protection rackets and has become an entrepreneur. This quantum leap has been achieved largely through the lucrative drug trade, of which Sicily has been the undisputed center since the ''French connection'' was severed a decade ago.
Italy's national antidrug agency claims Sicily is now the United States' major heroin supplier, with an annual turnover estimated at $6 billion compared with the Fiat automaker's $8 billion. Additional millions are derived from ransoms for kidnappings (280 kidnappings in 1981 alone), smuggling, gambling, and arms traffic.
Rome magistrate Sergio Letizia, who investigates tax evasion, estimates that organized crime's dealings today represent at least 4 percent of the country's gross national product (nearly $11 billion dollars). And with these massive sums at stake, gang wars have erupted and killed 1,000 people in the last three years. More than 100 have been killed just since January.
But one of the most insidious consequences of this new financial power is a radical change in the Mafia's traditional relations with the political world. According to Mr. Arlacchi:
''Ten to 15 years ago, the Mafia's parasitic earnings required political complicity, but the clan chieftains remained in a subordinate position to the powers-that-be. The Mafia's newly acquired riches have made it more autonomous, and it now wants a direct say in the political process.''
Since 1979, Sicilian Mafia clans have liquidated all the top state officials on the island who lay in their way - a regional president, a public prosecutor, a chief of the Carabinieri (national police force under military command), a police chief, and leaders of political parties.
The new Mafiosi's direct participation in political and business structures is not only an issue of prestige but also flows from their need to launder, invest, and administer their wealth. The large sums had to come to the surface and be funneled into legal structures, an operation that gradually undermined many of the country's financial institutions and monopolized public works contracts on the island - worth nearly $600 million dollars in the last year.
Statistics show the rate of bank branches opening in Sicily in the last few years is the highest in the country, 400 percent. Evidence has been uncovered that convicted financier Michele Sindona's banks in Italy and in the US were freely used to recycle Mafia earnings - as was the Ambrosiano Bank, whose director Roberto Calvi was found hanging from a London bridge in June.
The new urban Mafia wields power far beyond its regional base. And its exploitation of Italy's frail institutions reflects a pattern in a country rocked by a decade of terrorism and a long string of scandals:
* An oil fraud of the government treasury is said to have cost the Italian state an estimated $2.35 billion in lost tax revenues.
* Continuing revelations of the pseudo-Masonic Lodge known as Propaganda 2, or ''P-2,'' paint a picture of a virtual shadow government whose members included ministers, party leaders, Army generals, secret service chiefs, and businessmen, bankers, and journalists. Its disclosure last year toppled the ruling coalition of Prime Minister Arnaldo Forlani.
* The Calvi affair is intertwined with the mysterious activities of P-2 founder Licio Gelli, who was arrested Monday in Geneva on an international warrant for subversion and political and military espionage in Italy. It even casts its shadow over the hallowed palaces of the Vatican, whose bank issued letters of patronage vouching for the Ambrosiano Bank's missing $1.4 billion.
The parliamentary inquiry commission investigating the P-2 lodge is tracing drug trafficking, the Mafia, and international arms sales. It is trying to unravel Mr. Gelli's ties with Mr. Sindona (who was sentenced to 25 years in jail for misuse of funds in the Franklin National Bank, which he owned) and with Latin American dictatorships.
Investigators in Bologna also have charged that Gelli organized and financed the fascist bombing of the city's train station in 1980 that claimed 85 lives and injured more than 200 people.
The ramifications and goals of these and other scandals go beyond traditional corruption. They signal what Prime Minister Spadolini calls the emergence of ''invisible and parallel powers.''
Political writer Alberto Ronchey has warned that ''Italy's political malady is approaching a climax.'' This malady, experts agree, is the system's immobility. Political power has been concentrated in the Christian Democrat Party for 38 years and this lack of an alternative has weakened the state's institutions and their authority.
''This situation is unique in Western democracies,'' says political scientist Giorgio Galli, ''and has undermined the system's checks and balances. On the strength of its grip on the power structure, the Christian Democrat Party has gradually identified itself with the state.''
Forty-two revolving-door governments in 37 years have bolstered the party at the expense of the state's authority. Mr. Ronchey points out that ''when a Cabinet and its ministers remain in office an average of six to nine months, real power lies within the party and its patronage system.''
The flourishing underground economy, which trade union estimates place at 30 to 40 percent of GNP, demonstrates that, like politics, economic activity tends to take place outside official channels.
All political forces agree that absolute priority must be given to strengthening institutions and restoring their credibility. It will not be an easy task.