I KNOW what that is - a kangaroo!" shouts a young boy as he dashes to tell his mother about his latest discovery at London Zoo. Unaware that he has actually seen a llama, the child is thrilled with his find and eager to identify more animals.Will the youngster be able to return to this world-famous zoo once he's learned how to read the information signs about the animals there? The Zoological Society of London is doing all it can to make that possible, despite financial problems that threaten to close its 165-year-old zoo at Regent's Park. So precarious are the zoo's finances - with annual losses of $2.5 million - that until recently it was feared the zoo would have to close this autumn. But the Zoological Society has decided that job cutbacks and the removal of some of its 8,000 animals to new homes will provide a year's grace in which to seek private and corporate sponsors as well as government backing for a $20.4-million remodeling plan. A major aim of the plan, which would take three years to complete, is to halve the cost of keeping the animals at Regent's Park while giving the remaining animals more living space. Many animals now living at the zoo would be moved to the Society's wild-animal park at Whipsnade in the countryside north of London, with the remainder being sent to other collections. The new-look zoo would have only 2,000 or 3,000 animals, with each species displayed in relation to others that share the same habitat. In addition to providing the old-fashioned pleasure of seeing animals up close, the zoo would teach people about the need for global conservation by showing the interrelatedness of animals, their habitats, and human activities. Visitors would get an overview of global environmental issues at an exhibition featuring state-of-art interactive media as well as live animals. There would be a special exhibition devoted to the African continent, where the Zoological Society is involved in extensive field work. Giraffe, zebra, and gazelle would be seen there as well as smaller mammals, birds, and reptiles. Dramatic wide-screen films and other audio-visual techniques would be used to tell about environmental problems in Africa and how t hey are being tackled. Asian elephants, tapirs, and gorillas would inhabit a display about forest habitats. Other displays would focus on wetland habitats; endangered species like Asian lions, Sumatran tigers, and Persian leopards; and environmental education. The zoo hopes to increase its educational activities by setting up learning areas for specific age groups using play materials, environmental models, computers, and other interactive tools in addition to domesticated animals. There are also plans to establish an education training center for teachers in conjunction with the World Wildlife Fund. The public has rallied to the zoo's support. Hundreds of thousands of people have petitioned the government to reverse its previous decision not to assist the zoo, and $680,000 has been donated during the past three months to the Society's Save Our Zoo Appeal. Bake sales, discos, sponsored walks, and dozens of other money-making schemes have been launched by ordinary people who believe the zoo is an essential part of the city's life. I REALLY think the zoo should stay where it is," says Harry Moorhouse, a school caretaker who raised $340 on his northwest London campus by setting up a disco and inviting all the pupils to attend. "I took four kids from the school [to the zoo] recently, and two of them had never seen a camel or a giraffe before. "It's not enough for people to learn about animals from nature programs on television," adds Mr. Moorhouse, who says many inner-city children might never have the opportunity to see animals up close if the zoo closes. David Jones, director of zoos for the Zoological Society of London, concedes that not everyone feels so favorably. "Of course it is argued that seeing an animal in the zoo is no substitute for seeing it in the wild, and that may be true," says Mr. Jones. "However, for many people it is simply a financial impossibility to go to Africa or South America to see the animal in the wild. For these people and many more, zoos provide an opportunity to make the emotional and rational commitment essential to the future of conservation. Nobody is arguing that zoos are perfect or that they are a substitute for the wild, but it is important to place them - the responsible, good zoos - in the overall context of conservation and to recognize that they perform a valuable function." While London Zoo fights for survival during the coming year, children and grownups will continue visiting what naturalist David Bellamy described as "that magical place in the middle of London where so many of us first met an elephant face to face." When just such an encounter took place the other day, one schoolgirl let everyone within earshot know what she thought. "He's a baby?" she blurted. "He's as big as a jeep!"