AFTER days of controversy, sparked by critical remarks about West Germany, France, and leaders of the European Community made in a magazine by one of her most senior ministers, Prime Minister Margaret Thatcher finds herself increasingly isolated within her own Cabinet. The minister, Nicholas Ridley, who held the post of trade and industry secretary, was forced to resign Saturday after causing consternation in the ranks of the ruling Conservative Party and stirring up a hornets' nest among Britain's European allies.
In an interview with the Spectator political weekly magazine, Mr. Ridley had described European monetary union as ``a German racket designed to take over the whole of Europe.''
The deutsche mark, he said, was always going to be Europe's strongest currency because of German ``habits.''
He went on to accuse West German Chancellor Helmut Kohl of wanting to ``take over everything,'' said the French were ``behaving like poodles,'' and claimed that the European Community is run by ``17 unelected, reject politicians.'' The European Parliament, Ridley told the Spectator, was so ``supine'' that ``you might as well give sovereignty to Adolf Hitler.''
Ridley has always been one of Thatcher's most outspoken ministers as well as her closest ally, and his reservations about the EC were well known. But the vehemence of his verbal onslaught caused general astonishment.
The on-the-record interview, which was recorded on tape, was conducted by the Spectator's editor, Dominic Lawson. Mr. Lawson's father, Nigel Lawson, resigned as Thatcher's Chancellor of the Exchequer earlier this year because of disagreements with the prime minister over policy towad Europe.
The offending interview's effect at 10 Downing Street and in government offices throughout Europe was electric.
Thatcher demanded that the remarks be withdrawn. Ridley reluctantly did so, and offered expressions of ``deep regret.'' But in Bonn outrage was the immediate - and continuing - reaction.
Lutz Stavenhagen, a senior aide of Chancellor Kohl, described the Ridley remarks as a ``scandalous'' attack that would ``discredit the entire EC.''
Jean-Pierre Cot, leader of the French Socialist group at the European Parliament in Strasbourg, said the remarks were ``intolerable.''
West German press reaction was heavily adverse. Particular exception was taken to a cartoon on the cover of the Spectator which had shown Chancellor Kohl with a Hitler moustache and haircut.
The problem posed for Thatcher by what her closest political friend had said was - and remains - enormous. Ridley's views on Germany and Europe are known to be close to her own.
This point was underlined when it was revealed Sunday that in March the prime minister had presided over a special seminar on the ``German problem'' at Chequers, her country home. The seminar, attended by distinguished academics from both sides of the Atlantic, produced a memorandum, leaked to the British press July 15, in which Germans were described as ``bullies'' with an ``inferiority complex.''
Some of Thatcher's closest supporters expressed their dismay at Ridley's onslaught on West Germany and at the fact that many in Britain and other parts of Europe were inclined to believe that what he had said reflected the prime minister's own opinions.
David Howell, chairman of the influential House of Commons Foreign Affairs Committee, said: ``The huge task now facing the government is to restore the vigor of its whole European policy and to overcome this setback.''
Other leading Conservatives, however, argued that it had not been necessary for Ridley to resign. John Biffen, a former Thatcher Cabinet minister, said he agreed with many of Ridley's sentiments, ``though not with the language in which he expressed them.''
These divisions, together with the fact that it took more than 48 hours for the prime minister to persuade Ridley to resign, have exposed Thatcher and her government to sharp attacks from the Labour opposition.
Labour Party leader Neil Kinnock urged the prime minister to sack Ridley instantly. If the minister stayed in the Cabinet, he said, it would be because ``his views are her views.''
The prime minister refused to dismiss Ridley, saying instead that he should make up his own mind whether to step down. While Ridley was taking more than two days to decide, Labour spokesmen assailed the prime minister for hesitating to sack him.
Roy Hattersley, the Labour Party's deputy leader, said: ``The real issue is Thatcher's lamentable failure to act decisively.''
Media comment has been severely adverse. Neal Ascherson, a senior columnist for the respected newspaper ``Independent,'' described Britain under Thatcher's leadership as ``a raft being poled away into the sunset by a mad queen whose shouts grow gradually fainter.''
One effect of the dispute has been to cancel out attempts made by Thatcher, Foreign Secretary Douglas Hurd, and Chancellor of the Exchequer John Major to make Britain's policies toward Europe seem more cooperative and flexible.
A senior Conservative minister said: ``In a single stroke, Ridley wiped out six months of effort.''
Public reaction in Britain is difficult to gauge. One opinion poll last weekend showed a majority of Conservative voters broadly favorable toward Europe, but with a substantial minority sharing the Ridley assessment of West Germany.
Filling the Cabinet gap left by Ridley's departure was one of the reasons for Thatcher's reluctance to see him go.
He was the last true Thatcherite at the upper levels of government, and could always be counted on to come to the prime minister's aid when pro-Europeans in the Cabinet opposed her.
The new trade secretary is to be Peter Lilley, a right-wing Conservative who moves from a junior post at the Treasury. He shares the prime minister's reservations about European integration.
Last month he said: ``In the foreseeable future there is not the remotest possibility of all the European states merging into a single state under a single government.''
Current plans for monetary union within the European Community, he went on, cut ``to the heart of sovereignty and self-government.''
Mr. Lilley is a relative newcomer, having served only seven years as a member of Parliament. Political commentators appear to share the view that he will have difficulty propounding Thatcherite views against arguments certain to be deployed in the Cabinet by other, more senior and experienced ministers.
This assessment reinforces the impression that the departure of Ridley marks a weakening in Prime Minister Thatcher's ability to ensure that her views prevail in Cabinet.
It may also reduce her authority when she addresses the Conservative Party's annual conference in the fall.