The renovated National Theater outdazzles even its hit musical

It's not often a theater upstages the play it's presenting. But the historic National Theater, built in 1835 when Pennsylvania Avenue was still unpaved, has just reopened after a year-long, $6.3 million restoration that outdazzles even its hit musical. David Merrick's revival of ''42nd Street'' may send audiences tap dancing out into the night, but it's the National itself that the audiences are chattering about between acts.

The New National Theater Corporation and the Shubert Organization hired Broadway designer Oliver Smith to renovate the venerable but shabby National when it closed last year to modernize its heating, air conditioning, and communications systems. Washington theatergoers familiar with its traditional but threadbare red and gold interior have been arguing since the reopening about controversial changes by Mr. Smith, who designed ''My Fair Lady.''

His highly stylized and colorful restoration, inspired by the Georgian Regency Period, pits walls that are the chlorine turquoise of a Hollywood swimming pool against plush seats and theater curtain in an astringent apricot shade variously described in the press here as canteloupe, salmon, and melon. Its critics say the aqua and peach decor reminds them of Howard Johnson's or of nursery colors; its fans says it's a dramatic and stunning restoration of the country's truly National Theater (which has survived four fires and numerous threats of demolition since 1835.)

The $1 million interior redecoration of the National includes 45,000 pounds of creamy Italian marble (donated by the Italian government) for the expanded lobby, a $30,000 custom-woven house curtain in melon and blue tones, and 84 new chandeliers swathed in ropes of crystal like a Ziegfeld Follies chorus line. Decorative plaster work in the auditorium, once hidden under layers of dark paint, has been restored and highlighted in ivory and gold. The five-story renovation includes 27 new dressing rooms and a tripling of the size of the Helen Hayes Gallery upstairs with its mango-colored walls.

The opulent decor at the National was the backdrop for a Washington media bash at its benefit opening, attended by the President and Mrs. Reagan and members of Congress and of the Supreme Court, as well as stars of both the political and theatrical persuasion. They watched the show's stars, Dolores Grey and Barry Nelson, along with 100 hoofers and singers, belt out such classics as ''Lullaby of Broadway,'' ''We're in the Money, and the title number, ''42nd Street.''

The Reagans enjoyed it enough to try to arrange for a few numbers from the show at a White House state dinner, but the large scale and the bulk of the numbers made it impossible to fit them into the East Room.

The renovation of the National, which is also booked this season to present ''Cats'' and ''Brighton Beach Memoirs,'' is part of a redevelopment of Pennsylvania Avenue. The development includes the adjacent new Marriott Hotel, a new National Press Club building and retail center.

The National's renovation was carried out via an agreement with the Pennsylvania Avenue Development Corporation, the Marriott Corporation, the Quadrangle Development Corporation, and the Aetna Life & Casualty Company who jointly shared in its $6 million cost.

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