THEODORE SHACKLEY spent 30 years in the Central Intelligence Agency and served, among other posts, as station chief in South Vietnam in the early 1970s. He was a shadowy figure, and as a correspondent there I was never able to interview him (in contrast to his successor who was an amiable and talkative fellow).

If this book is a fair reflection of his innermost thoughts, Shackley is a man of extremely strong views, specifically a doctrinaire belief in the benefits of counterinsurgency as an effective means of advancing American foreign policy interests abroad. The Indochina war was not only righteous, he plainly believes, it could have been won if the United States had pursued modern techniques of warfare. These fall between the pillars to total conflict and diplomacy -- the third option.

Now, free to unburden himself, Shackley puts forward a series of proposals intended to meet the challenges of various stages of insurgency. This is definitely not a memoir in which we are entertained with accounts of what worked and what did not in his intelligence career -- a career which may not be over, since his name has recently surfaced as a possible high-level CIA appointee under the new administration. Instead, the book is a blueprint for what should be done now. And Shackley's ideas, right or wrong, insightful or banal, are certainly timely since his case studies include El Salvador and Angola -- two main concerns of the Reagan administration.

I would have vastly preferred to read his version of what it was like to be station chief in Saigon where the CIA scored innumerable successes and yet lost the war. A detailed case study of how the U.S. mission functioned, properly sanitized and declassified, of course, would teach us a great deal about an effort that is little understood by most Americans. Shackley may yet write that book.

This one, despite its ambitious theme and current relevance, is pretty light weight. Shackley propounds an array of counterinsurgency principles, none of them very original. His message is that a low-key, tightly organized American intelligence team can achieve its mission. Needed are such time-honored intelligence tactics as penetration and surveillance, training of elite security forces and use of third country nationals. The Third Option is more of a counter-insurgency primer than a breakthrough of fresh thinking.

Undoubtedly, Shackley has been influenced to a great extent by his Indochina experience. For much of the time he was there, advanced counterinsurgency techniques, combined with conventional American military strength, actually seemed to be working. South Vietnam was relatively pacified and kept that way by a host of government programs emphasizing hearts, minds and security.

The effort collapsed after the U.S. withdrew its military backing, leaving the South Vietnamese feeling more vulnerable than they probably were.Their defeat was as much psychological as it was on the ground. The peoples' anticipation of disaster led to a self-fulfilling prophecy -- which highlights a basic fallacy in the case for counterinsurgency. The most successful program devised by intelligence experts is bound to fail if it lacks popular support. The leftist guerrilla's best friend is a repressive dictator like Anastasio Somoza of Nicaragua or Fulgencio Batista of pre-Castro Cuba.

Another major requisite to successful counterinsurgency is consistent support from American officialdom, whether it be the White House or Congress. The victory for pro-Soviet forces in Angola, for example, was a function of a self-imposed American restraint. The U.S. must be willing to stay the course if, to use Shackley's terminology, enemy insurgency moves from the initial cadre phase, to the incipient phase, the operational phase and the covert war phase. The lesson of Vietnam and Angola, he argues, is that bailing out doesn't work.

Shackley contends that a "reemerging American sense of values" indicates a popular willingness to support "low-cost, high impact covert action programs to achieve foreign policy objectives to help friendly nations resist subversion by the Soviet Union, Cuba or China."

Then closing out his case, he adds that "high-quality, timely intelligence" is essential. The bottom line in Shackley's view, not surprisingly, is that a less fettered CIA will serve the nation better than a hidebound one.He is especially critical of changes made in the just-ended era of agency director Admiral Stansfield Turner.

What Theodore Shackley basically wants is for the CIA to go back to the old days, only this time he wants counterinsurgency to work as well as he is convinced it can. Given the current political climate, it is a fair bet that somewhere -- and soon -- the theories will be tested.