By Salman Rushdie Granta Books/Viking. 219 pp. $18.95

FOR THE last year-and-a-half it has been impossible not to be aware of a dark shadow across any page one read, a shadow cast by the fatwa demanding Salman Rushdie's death for writing The Satanic Verses. One feared what might happen to an author condemned to silence and hiding. There were rumors that he was writing nevertheless and one was led to expect a collected "Letters from Nowhere" or "A Message from Silence" -- dire and desperate.

The book that has emerged could not be further from anyone's expectations. It is indeed a message -- from the author to his son Zafar -- but one painted in all the vivid and glowing colors of a children's tale: affectionate, tender, comical and joyful. The broken creature one expected to see, sobered and saddened beyond recognition, has actually turned out to be a butterfly, exuberantly dancing, and it is pure delight to watch. It makes one laugh -- with relief, with pleasure.

Not that it is escapist fantasy. It is a fable that might be read on three -- or more -- levels, intricate and ingenious. On one, traditional and lighthearted, it is about the boy Haroun who finds that when his mother leaves home, his father Rashid -- a professional storyteller known as the Shah of Blah -- loses his gift for storytelling and, in most embarrassing circumstances, falls silent. With the help of a Water Genie called Iff and a cocky little hoopoe bird called Butt, Haroun travels to the talkative land of Gup and the shadowy land of Chup, whose tyrannical ruler plans to poison the Ocean of Stories. Aided by the chatterboxes of Gup through several hair-raising adventures, Haroun -- through a heroic act of faith -- restores the ocean to purity and the gift of speech to his father. If this sounds sentimental, it is no more so than any fairy story that must traditionally work its way through adversity to triumph, and affirm love and rebirth.

Nothing that Salman Rushdie writes is ever simple, however, and on another level the book is an ingeniously constructed fable about the war between Censorship and Free Speech with himself at its center in the guise of the storyteller Rashid (an allusion both to Rushdie and Haroun-al-Rashid of The Arabian Nights). As in all his previous work, a knowledge of Hindustani provides the clues to its inner meaning. The Ocean of Stories is no fancy but based on an 11th-century compilation of tales, the Katha-Sarita-Sagar or "Ocean of the Streams of Story," by the Kashmiri poet Somadeva. Twice the length of the Odyssey and the Iliad together, it includes the even older tales of the Hindu epic, the Ramayana, and the Panchatantra, which, in turn, was based on Buddhist Jataka tales of the 4th century B.C. One tale led to another, like a set of Chinese boxes, creating a technique that neighboring lands borrowed and employed in works like The Arabian Nights -- and so provided Rushdie with a literary map.

Their folkish, anti-Brahminical tone and irreverent exposure of avarice and hypocrisy would have appealed to him particularly. Since the Ocean actually originated in Kashmir (Rushdie's original home), he naturally takes the Valley of K for a setting, and the legendary Dal lake with its floating gardens, its houseboats with fanciful names (Arabian Nights Plus One) and its gorgeous birds is transformed into the Dull Lake, which is not dull at all once Iff and Butt appear to introduce young Haroun to its wonders as well as those of earth's second moon, Kahani (story) where the Gupwalas (chatterboxes) live in perpetual light and the Chupwalas (silent ones) in perpetual darkness.

The land of Gup has been thrown into pandemonium as the Princess Batcheat (chit-chat), beloved of the dashing but foolish Prince Bolo (speak) has been kidnapped to the land of Chup where it is rumored her lips are to be sewn together to turn her into the Princess Khamosh (silence) and she is to be sacrificed to the great idol Bezaban (tongueless) at the order of the shadowy tyrant Khattam-Shud (The End).

The Gupwalas prepare to go to battle under General Kitab (book) and as they bicker and argue while forming Chapters, Haroun reflects, "What credulous souls these Guppees are! And gentle . . . they are peaceful people indeed. But if they have to fight a war, what then? They'll be completely helpless, a lost cause." What opposition can they provide to the Cult of Darkness whose master preaches hatred against stories, fancies and dreams and now opposes speech altogether? "I have heard it said that some wild devotees of the Mystery work themselves up into great frenzies and sew their lips together with stout twine, so they die slowly of hunger and thirst, sacrificing themselves for the love of Bezaban."

In telling his tale, Rushdie borrows from sources as disparate as the conventions of the Bombay cinema (Batcheat descending a grand staircase to her beloved Bolo, then breaking into a dreadful song); the films of Satyajit Ray (Goopy and Bagha are the heroes of a much-loved film Ray made for children); comic books and cartoons ("crash!wham!spatoosh!"); Star Trek (a particularly important gadget is P2C2E -- Processes Too Complicated to Explain); and even the jingles on signboards along the highways of Kashmir ("If from speed you get your thrill/Take precautions -- make your will").

He explains that "the stories were held here in fluid form, they retained their ability to change, to become new versions of themselves, to join up with other stories and to become yet other stories, so that unlike a library of books, the Ocean of the Streams of Story was much more than a storeroom of yarns. It was not dead but alive." The language his characters use is as eclectic, as salty, peppery and colorful as those bags of snacks known as Bombay Mix -- made up as it is of the ryhmes and assonances so beloved of children, and vocabulary drawn from as many lands as the stories themselves -- "Curtains, history, goodnight Charlie, i.e. Khattam-Shud," and "Zap, bam, phutt, finito."

Watching a marvelous display of juggling by Blabbermouth, Haroun comments, "I always thought story-telling was like juggling. You keep a lot of different tales in the air, and juggle them up and down, and if you're good you don't drop any. So maybe juggling is a kind of storytelling too." Even the cultmaster Khattam-Shud has not been able to cancel a performance that dazzles the eye as it erupts triumphantly out of the dark in a display of fireworks.

Anita Desai is Purington Professor of English at Mount Holyoke College and author of "In Custody" and "Baumgartner's Bombay."