In 1981, Salman Rushdie's amazing novel ''Midnight's Children'' won Britain's major literary award, the Booker Prize, and instantly established him as an extravagant inventor. Rushdie's rich portrayal of his native India successfully adapted the methods of the Latin American ''magical realists'' to new soil. It was a novel peopled with larger-than-life characters and studded with impossible occurrences. Its brazen hyperbole seemed the perfect expression of that sprawling, unhappy country's ''illogical'' nature.
Now Rushdie has applied his prodigious talents to a country that is ''not Pakistan, or not quite'' (as his omniscient narrator puts it). This new novel, ''Shame,'' assumes the existence of ''two countries, real and fictional, occupying the same space, or almost the same space. . . . My view is that I am not writing only about Pakistan.''
''Shame'' interweaves the destinies of three colorfully bizarre families. The story begins in a decaying mansion, which can be entered only via an enormous dumbwaiter. In this house the three reclusive Shakil sisters raise the son who was mysteriously born to one of them - no one ever learns which one.
The son, Omar Khayyam Shakil, grows up and away from his three mothers, goes off to medical college, becomes an eminent physician, and marries Sufiya Zinobia , the brain-damaged daughter of military leader Raza Hyder, the future strong man of the nation.
Next, the focus shifts away from Shakil and toward the Hyder family - particularly the political conflict between Raza Hyder and Prime Minister Iskander Harappa. Then, the focus widens to encompass a fabric of marital allegiances and near-misses and betrayals, concluding with an extended explosion of violence involving all the families.
It's the sort of story wherein an old man, dying, shouts out ''oaths and curses of a ferocity that made the air boil violently around his bed'' and a domineering husband possesses ''the power of accelerating the aging processes of women in his life.'' It is the sort of story in which the narrator (not distinguished in any way from the author) frequently interrupts to provide flash-forwards, to discuss his problems in shaping the story, and to rattle on about his impossible country and its unpredictable people. He even points out the inappropriateness of realism to deal with such materials, and shares with us his alternative solutions: ''My dictator,'' he announces, ''will be toppled by goblinish, faery means.''
The characterizations carry both literal reference and vivid metaphoric force. It's evident that Iskander Harappa represents former Pakistani Prime Minister Zulfikar Ali Bhutto, and General Hyder stands in for Gen. Muhammad Zia ul-Haq.
In Omar Khayyam Shakil (''a creature of the edge; a peripheral man'' troubled by a persistent ''dream of falling off the world's end''), we see what I'd guess is a portrayal of that country's intellectual elite - those who, as Omar eventually accuses himself, ''watched from the wings, not knowing how to act,'' while their country succumbed to dissension and war. I expect readers more knowledgeable than I about recent Pakistani history will discover other correspondences.
Rushdie shows a remarkable ability to suggest multiple levels of meaning in even his most outlandish people and situations. The Harappas' daughter, Arjumand (''the virgin Ironpants''), is an amusing, even terrifying emblem of class-conscious female purity. The Hyders' daughter, nicknamed Good News, reflects, in her propensity for multiple births, the culture's self-destructive fertility. The unfortunate Sufiya Zinobia's madness grows to mythical dimensions; she becomes a monster, strong enough to tear off men's heads with her bare hands, an embodiment of her country's irrational violence, ''disorder's avatar.''
The novel's plot, though complex and occasionally repetitious, is equally versatile. It encompasses Iskander Harappa's political rise and Raza Hyder's successful coup. These inventions exhibit real satirical vigor, and also offer a persuasive picture of a society struggling under a dictatorship.
Omar Khayyam Shakil's sheltered childhood suggests the refusal of privileged people to take a part in shaping their country's experience. His final comprehension of the Shakils' long-buried secret (they are ''a family in which brothers have done the worst things to brothers'') eloquently conveys a truth that resonates far beyond him.
Rushdie is less successful in conveying his title theme - that the code of honor by which these people live makes them perceive shame in every deviation from approved behavior. The idea, although appropriate, is simply hammered out too bluntly.
Rushdie's exuberant style saves the book from its worst excesses, even though he is frequently guilty of overstatement. His narrative imagination is similarly inconsistent. The middle third of the novel is flat and slow-paced; yet the final 100 pages - particularly the vision of last judgment that is both climax and resolution - are magnificently imaginative and dramatic.
The crucial question about ''Shame'' is whether it can be called a fully original work, and not just a continuation of ''Midnight's Children.'' The two novels share many similarities: a narrative embellished with continual digressions; a main character's unusual birth and upbringing; the extended rivalry between two more or less equally prominent protagonists. And there are other echoes. It's as if Rushdie's earlier novel dug a groove from which he hasn't yet escaped.
That, indeed, would be a shame, for this is a novelist of remarkable gifts, who seems capable of greater accomplishment.