PRIME Minister Margaret Thatcher has all but abandoned her attempts to prevent the political and economic integration of the European Community. With last weekend's Dublin summit of EC leaders behind her, she is concentrating on averting a takeover by Brussels of key British political institutions, including the monarchy.
As well as being a tardy recognition of her isolation in Europe on the unity issue, Mrs. Thatcher's new approach is an attempt to defend her increasingly exposed political position at home, and to advance the flagging cause of her ruling Conservative Party.
She has also decided to back away from her fierce commitment to a new local government tax, which has deepened her government's unpopularity.
An early test of the new Thatcher strategy comes on May 3. That is when millions of English voters will elect new local government authorities.
Opinion polls last weekend suggested that the opposition Labour Party could gain 600 local government seats nationwide, and that the Conservatives could lose 350. Neil Kinnock, the Labour opposition leader, has forecast that the May 3 result will speed Thatcher's departure as prime minister.
Tony Marlow, a leading Thatcherite member of Parliament (MP) who entered Parliament in 1979 - the year the prime minister first took office - reflects the views of many anxious Conservative politicians when he says: ``The first essential element to the maintenance of Thatcherism is not Mrs. Thatcher herself, but Conservative government.''
The jury, he says, is still out on Thatcher's personal prospects.
Mr. Marlow's public doubts are shared by a growing number of Conservative politicians who are worried about Thatcher's poor performance in the opinion polls. They hope that her new line on Europe will attract public support back to the ruling party in coming weeks.
In Dublin, the British leader succeeded in obtaining agreement from the other leaders to have the 12 foreign ministers work out specific details of European union before proceeding further on the subject at the next EC summit scheduled for June.
While she was in the Irish capital adjusting her posture on Europe, Thatcher ordered her ministers in London to begin retreating on a domestic policy issue that has contributed heavily to Conservative unpopularity: imposition of a uniform poll tax, or community charge, on all adult citizens.
The poll tax has provoked widespread rioting, including a rampage by violent protesters through central London on March 31.
Conservative MPs and local government representatives have been coming under intense pressure to persuade the government to blunt the financial impact of the new tax on voters who normally vote Conservative.
The prime minister's two-pronged strategy follows a series of opinion polls showing the Conservatives trailing Labour by as much as 25 percent.
The dismal figures, which have been accompanied by rising inflation, the threat of higher interest rates, and a widening of Britain's monthly external trade gap to $3.6 billion, have caused alarm among leading Conservative MPs.
Tony Marlow's comments are probably the toughest so far from a Thatcherite. On April 30, he declared: ``She has long been respected but seldom been popular. She has never suffered from her present levels of popular antipathy.
``The old feel she does not care; the young feel she is out of touch; the working class feels she does not understand. They are a formidable coalition.'' Marlow is worried about widespread public perceptions that the poll tax is unfair and is a serious political blunder.
David Howell, formerly a senior Thatcher minister and now chairman of the influential House of Commons foreign affairs committee, emphasizes the European dimension of the problems facing the prime minister.
A Conservative loyalist who in recent months has become steadily more critical of Thatcher's stance on Europe, Mr. Howell said: ``What we need now is a really creative, positive case for the EC's development.''
Thatcher's advisers in Downing Street do not see things that way. They privately acknowledge that at the next EC summit scheduled for June, Britain will probably be outvoted by governments willing to support West Germany and France in their demands for European union by 1993.
In Dublin, Thatcher warned that a hectic dash for European union might undermine the British monarchy and the British Parliament, and dilute the British national character - issues calculated to evoke patriotic responses among voters.
Not all Conservatives, however, agree with her approach, and some are openly hostile. Edward Heath, the former prime minister, who led Britain into the EC in 1973, said of Queen Elizabeth II, ``Her role will not be altered, and nor will that of the other five monarchs in the European Community.''
Responding to Thatcher's playing of ``the royal card'' in her revised approach to Europe, Gerald Kaufman, the opposition Labour Party's foreign affairs spokesman, scornfully labeled it ``pathetic.''
``The other EC monarchies do not feel under threat,'' he said. ``Mrs. Thatcher seems to be worried less about Queen Elizabeth II than about Queen Margaret the Pretender.''