The island of Malta, in the middle of the Mediterranean, has become the scene of political turmoil as the country's leftist government continues to confront the Roman Catholic Church, the business community, and the opposition Nationalist Party.
Dom Mintoff, prime minister for the past 13 years, has sought economic help from Britain and asked the Italian government to mediate in his ruling Labor Party's quarrel with the church.
Neither initiative appears to have produced the desired results, and travelers to London from the capital, Valletta, speak of a polarized community of 300,000. They say events threaten to spell the end of democracy in Malta.
Leaders of the Nationalist Party claim Mr. Mintoff is preventing them from exercising free speech. Roman Catholic leaders complain that the prime minister is dictatorial and that he is trying to strip their church of its assets.
Last month the Maltese hierarchy shut down schools under its control when Mintoff ordered that there must be no fees charged for private education. Half of the island's schools are run by the church.
The closure of the schools, coupled with bad figures on the island's economy, prompted Mintoff to travel to Rome and London, looking for help.
Prime Minister Margaret Thatcher told him that Britain viewed with dismay recent developments on the island which in World War II won the George Cross for its fortitude in the face of German attack.
British diplomats listed policy decisions by Mintoff's government that cause alarm in London and other European capitals:
* Allowing the Soviet Union to bunker oil in Malta, which occupies a strategic position in the Mediterranean.
* Entering a treaty of friendship with Libya's Col. Muammar Qaddafi.
* Accepting military aid, including weapons for the use of internal security police, from North Korea.
Mintoff also stands accused of manipulating the democratic process in Malta. In a general election in 1981 for a 65-member parliament, the Labor Party won a three-seat majority despite an absolute electoral majority of 51 percent for the opposition Nationalists.
The political opposition complains it is not allowed free access to television and radio, which are state-run. In 1981 the Nationalist Party set up its own television channel, based in nearby Sicily. Mintoff complained to the Italian government, which closed the station down.
Malta gained independence from Britain in 1964. For some years London maintained a naval base on the island, and this provided many Maltese with jobs. But after coming to power, Mintoff began a campaign of denigration against the ex-colonial power, culminating in a decision to close the base.
At once the Maltese economy began to decline. Unemployment of around 20 percent is reported by foreign diplomats in Valletta, though Mintoff says it is only 8 percent. To lessen the impact of closing the British base, Mintoff approached Libya for help.
His opponents say Moscow is also assisting with foreign exchange, though this is denied.
What cannot be denied is the ferocity of Mintoff's assault on the Catholic Church, which counts two-thirds of the Maltese population among its adherents.
Amid claims that Roman Catholic institutions were standing in the way of the government's economic plans, a group of dockyard workers who support the Labor Party attacked the Curia, the church's headquarters, desecrating two chapels.
The assault was reportedly led by Carmelo Mifsud Bonnici, whom Mintoff has already named as his preferred successor.
One serious effect of such behavior has been a reduction in Malta's attraction as a tourist center. A few years ago the island was popular because of its mild climate and friendly population. Many Britons purchased flats and villas, intending to retire there.
But British travel and property agents now find it difficult to persuade people to think of Malta as a place of rest and sunshine. The island is thus losing much potential income and is finding it even more difficult to balance its budget.
A former resident says: ''We left because we did not feel that Malta has an assured long-term future. The authorities have ceased to operate in a democratic way. We do not like Mintoff's policy of forming friendships with communist states and men like Qaddafi.''
In Whitehall it is felt that little can be done to alter Mintoff's policies. Officials note that during the follow-up talks to the Helsinki Accords, of which Malta is a signatory, Mintoff resisted formulations on human rights that would put his own administration in a poor light.
British officials expect Mintoff to retire soon, but they rate his probable successor, Dr. Mifsud Bonnici, as being even more radical, especially on church matters, than the present prime minister.