This is a story with an almost-happen ending, a tale in which a group of mostly poor and powerless people fight to save their community. In the process they defeat a city government and frustrate real estate developers. The group even goes on to build its own housing, plant its own parks, and create a community so thriving that outsiders are rushing to get in.

The setting is a stored one - Covent Garden, the historic district in the heart of London. The roughly 100 acres that Londoners call by this name contains about 300 historic buildings.

[WORD ILLEGIBLE] Gaynne won the heart of Charles II. Samuel Johnson, met his Boswell, and T.S. Eliot clerked for Lloyd's Bank. For generations the murmur of genteel crowds exiting the Covent Garden Opera House came up against the Cockney cries and bustle of the Covent Garden Market, as it did the night Henry Higgins met Eliza Doolittle.

Movie fans may remember the market better as the setting for Alfred Hitchcock's "Frenzy" in which a corpse is stashed amid sacks of potatoes.

In the mid-1960s the Covent Garden Market Authority decided to move the world-famous produce and flower market away from the site it had occupied since the Earl of Bedford established it in 1970.

The move would leave a 14-acre vacancy. The Greater London Council (GLC), together with the local authorities of Camden and Westminister, assigned a special planning team to fill the area.

Why go for a mere 14-acre Band-Aid, city planners of the 1960s reasoned, when with major surgery London could have a bionic neighborhood - shiny, orderly, super-functional and without traffic jams. So the planners drew up a scheme to redevelop 96 acres of Covent Garden.

A token "historic spine" of old buildings would be saved; 65 per cent would be torn down. The GLC would help assemble big "economic" land parcels for private developers.

The crazy mix of artists and craftsmen who were nesting in the nooks and crannies of Covent Garden's old buildings were not keen, however, to make way for hotels and a conference center. The hundreds of public-housing and charitable-trust tenants had no use for the planned, 4,900 parking spaces. All the residents who'd endured rotten - or no - plumbing for the sake of a home near their jobs, friends, and even birthplaces, refused to see their community torn apart for through roads.

They took up arms, forming themselves early in 1971 into the Covent Garden Community Assn. (CGCA). For two years they protested, marched, demonstrated. They fought with wit, flair and the tenacity with which Londoners had withstood the blitz in World War II. They spalshed Covent Garden with portraits of Adolf Hitler captioned, "Hitler couldn't destroy Covent Garden, don't let the GLC."

They won. In 1973 the British government threw out the GLC-sponsored plan.

And in the winning, the tiny community of fewer than 3,000 people was transformed.

Covent Garden now sustains the kind of exuberant, supportive community life of which planners and sociologists dream - two-day annual festivals, a May Fayres, a beer fest, community theater and more.

The CGCA runs a shop advises tenants associations, defends tenant rights, keeps track of building uses, lobbies for services and publishes a newspaper. Last September it produced its own alternative plan for the area, which was largely incorporated into the official GLC version approved this spring. Evocatively titled "Keep the Elements Out of the Garden," the CGCA plan emphasized renovation of existing buildings, small-scale land improvements, retention of light industry and no more office buildings.

The community group has a genius for plunging ahead on a shoestring with community improvements a local government could dither over for years. After long negotiations they won the right to install a sports center in the old market's Jubilee Hall (named for Queen Victoria's jubilee.)

Increasingly the community is getting on with the business of housing itself. In March it completed renovation of three warehouses in Short's Gardens into five apartments and several shops, including the tiny, frenetic offices of the CGCA. The apartments cost only $32,000, though the GLC architects, valuers and engineers had warned that it couldn't be done for more than twice the price. More such projects are in the works.

The company's spunk has helped attract a slew of colorful specialty shops, boutiques, wine bar, and restaurants to the area.

Covent Garden's gradual evolution into the Georgetown of central London means trouble, however, for 13 private residents. Real estate prices are up and property sales activity is intense. The community newspaper carries tales of landlords harrassing rent-controlled tenants, and of high rents driving out useful, though low-profit shops, such as greengrocers.

Pressures from tourism and commercial development will only increase, especially in about two years time when the GLC has finished renovating the grand old central market building to include shopping arcades. This should give the district a focal point and real commercial drawing power.

As largest landlord in the area, the GLC holds many cards. But the CGCA is fearful of the council's business-oriented Tory majority.

For the CGCA knows no government can very well make the place a worker's reservation, with barricades of ell pies to keep out the "trendies."

"The burning issue is who should come here, what should our working and residential community be like," says Christina Smith, who sits on all sides of the issues as a resident, shopkeeper, landlady and long-time community activist. Just keeping things small," she suggested, is one of the keys. CAPTION: Picture 1, A tug-of-war[WORDS ILLEGIBLE] community festival and Covent Garden Market; Picture 2, before it was move [WORDS ILLEGIBLE] to the and the portico of St. Paul's Church.[WORDS ILLEGIBLE] London Department of Architecture and Civic Design; Picture 3, The Japanese Water Garden at Covent Garden, FOK photo