IT IS THE HAPPY FREEDOM of the fantasy novel to create a new world with a new integrity all its own. Yet it is the sober business of that world to twin the one we already know -- so that we can trust the artistry of the fantastic and believe for a while; and so that we might, through new eyes, know the real the better.

The story, the overall design of William Horwood's novel, Duncton Wood , achieves that touchy balance between freedom and reflection. The story is a grand thing and works just fine.

Duncton Wood is a "System," a complicated network of tunnels inhabited by moles who talk, laugh, suffer, love, remember and plan for the future. It is a country unto itslf, governed by a council of "Elders," moles of superior authority representing the several provinces within that system. And it is a society possessed of a long, holy history of generations of moles who have left behind them certain reminders of a past more honorable than the present, a time when moles were "warriors, not fighters; believers, not arguers." On a hill above the rest of Duncton are the tunnels of the Ancient System, dug by the ancestors with such reverent cunning that they still hold secrets and the power to frighten the contemporary mole: No mole lives in them. And at the top of the Ancient System stands the stone, which once drew the devotion and the worship -- the faith -- of everymole; but now only the oldest moles remember the rituals of the past and keep faith.

That's Duncton. But this system is only one of many systems, countries, which altogether cover a vast geography and which are related to one another by their deep past and by a common faith that arises from the past. Six other systems are blessed with the presence of a stone like the one in Duncton. The stones cross time and space to bind every mole, living and dead, here and there, into a fellowship of profound secruity and peace -- if only the moles would please keep the faith!

But that precisely is the problem. Modern, practical, criminally self-concerned, moles are no longer keeping faith. So the societies are deteriorating. And of their faithlessness come three great catastrophes, and they suffer.

To Duncton comes Mandrake, a mole more casually violent and huger than any other. By murder and fear he seizes power; by fear and brute force he rules the system, setting province agains province and mole against mole; and they suffer. But they suffer the more under the rule of his successor; for Rune governs by cold craft, causing open warfare between systems, between Duncton and the pasture moles.

Finally, all systems everywhere suffer a natural diaster -- for nature, in this book, participates in the spiritual conditions of the moles. Plague infects the moles until very few are left alive, and those few too weak, confused and suspicious to direct themselves.

But from the beginning of the story, there are several moles who take the field against unfaith and the batterings of despair, who labor to restore the old traditions and to accomplish the faith. There is Bracken, and there is Rebecca. Horwood handles their struggles very well, for they must themselves mature before they can be of any salvation for the system; and their love must grow pure -- painfully -- before it is a ministration.

In fact, this entire scheme of the story rings true enough to hurt the reader, to cause him yearnings, and to lift him up. We are willing to believe in the doomful judgment of history and in the consequence of individual devotion: good Bracken, lovely Rebecca -- they can be good and lovely for everymole, and all may be blessed by two.

Horwood also succeeds at individual set pieces within the larger scheme.

Mandrake's birth is a painful thing to watch; the reader is left to wonder for a mole who could survive the cold adversity of it.

Rune's death is no simple murder, but an exquisite revelation of the power mere goodness has over evil. "Bracken barely seemed to move and yet, when Rune looked round to see if he was following, there he was, right behind him, not angry but compassionate, and that was something Rune could not face . . . . Rune ran on, the void of pity behind him far, far worse than the void ahead."

Horwood's weakness, however, is in the handling of his characters; and sometimes the fantasy fails because it does not well reflect the world we know. s

Too often the characters seemed to be moved at the author's insistence: a second pregnancy for Rebecca, so that Bracken can be jealous; a too-ready jealousy from Bracken, so that they can be separated again; a separation, so that the final fulfillment of their love can be final. It looks as if the author wants it to happen at the end,so he works it that way. But this fantasy can't be true unless it's true for man and mole together.

Also, the author asks his reader to believe that his characters possess certain qualities simply because other moles see those qualities. If a mole named Rose feels awe for Rebecca, that doesn't convince us until we, too, see cause for such awe. We can't just take some mole's word for it.

And the love scenes. It is no problem that they occur between moles. In the fantasy we believe that -- indeed, we should believe it and rejoice in them since so much in this story depends on love. The problem is that they do not convince us. They are somewhat overwritten, and the murmurings of the principals become a bit silly. Neither works of realism nor fantasy can get away from that.

Altogether, Duncton Wood is a breathtaking achievement, and I am grateful for it. William Horwood's imagination is both reaching and sound. But it must be said that the real grip and the spell of this book is in its overall scheme more than in its characters. The story drives the moles rather than arising from them.