The calligrapher Sheila Waters was turning the oversize leaves of handmade English paper on which she had been inscribing Dylan Thomas' verse-play "Under Milk Wood." For this work, Waters adapted a style of writing first developed in the ninth century by French monks. Last week she delivered the finished manuscript to the London art collector who commissioned it from her 18 years ago.

She paused to examine an unfinished bit of illumination. The crisp, lilting forms of the black letters seemed to wind themselves around Thomas' rich syllables and to lift the poetry off the page. You found yourself speaking the verse aloud, which is precisely what the poet intended.

"Calligraphy" means beautiful writing." Sheila Waters is regarded as a master of this ancient craft. Which means that when the British Architectural Association, for instance, wished to convey its loyal respects to the Queen on the 25th anniversary of her coronation, it called upon Waters to prepare the official document. Waters' work has been exhibited in museums and libraries, and reproduced in books on the subject. Students and teachers of calligraphy come from as far away as New Mexico to study in Summer workshops at her Maryland home.

Waters is one of a handful of master calligraphers who have brought what she calls "the British tradition and craftsmanship" in this field to America where, in recent years, it has grown in popularity. The demand of expert instruction far exceeds the number of well-trained teachers. On a recent three-week tour, Waters conducted workshops for calligraphers both experienced and inexperienced in Los Angeles, San Francisco, Chicago, New York - and Great Falls, Mont., where some students traveled 250 miles to attend her classes.

There are 35 regional calligraphy societies in the United States. The Los Angeles chapter has about 3,500. Most of these constitute what Waters calls the "groundswell of dabblers" who have only elementary training and for whom calligraphy is a hobby. She estimates that several hundred of these have incomes as freelancers though only a few dozen can make a living with their skills.

These professionals do work as ordinary as placecards and wedding invitations and as elaborate as the framed commendations that hang on the walls of public officials. The White House, for instance, employs a calligrapher full-time to produce placecards, invitations, and programs for official functions. Waters once inscribed 35,000 names on a roll of honor for the Royal Air Force.

Twenty of Sheila Water's pupils are seated at the long tables where they've spent an entire day copying a single letter from a medieval manuscript. With a watchmaker's concentration, they compare dimensions with calipers, and turn their flatedged pens to vary the thickness of their strokes, then peer at the results through magnifying glasses. "Here we are," says one woman, "the monks."

Their teacher passes casually among them, a plump, pretty woman with careless gray hair, she reflects, "This is the dilemma - you realize that if you ever achieve perfection, the whole thing will go. You've got to go through all the discipline to reach the freedom. The line between discipline and freedom is like a tightrope. It's when you get just the right balance . . ."

Waters' study began when she was an 18-year-old art student in England. "Someone asked me to write them out a notice. I thought I ought to learn to do it properly, so I went along to a lettering class and it was a revelation. I found that I'd got a facility for it. And the way the ink just flowed with the controlled strokes - I had an over-whelming sense that this is it, this is what I was meant to do."

She proceeded to the Royal College of Art, where stiff examinations demanded hours of study in the British Museum, memorizing detaiis of old manuscripts. She examined styles of writing from Roman times, through the ninth century standardization of letters under Charlemagne, to the emergence of the italic hand during the Renaissance flowering of the art.

These studies gave her the historical perspective which, she says, "laid the foundation for everything since." Besides gaining intimacy with the classical scripts, she saw the importance to her art of developing a sense of taste and design - choosing a script that enhances the text and then placing it gracefully on the page.

"The principles are the same as in art - balance, coordination. texture, line . . . What is taste? Knowing, I suppose, what is fine and elegant from what is less fine, and what is downright coarse."

In 1953 she married a bookbinder named Peter Waters. Seven years ago he was named restoration officer at the Library of Congress and Sheila Waters began teaching calligraphy at the Smithsonian.

"When I first came here," she re-members, most people did not know what calligraphy meant. Since then its exploded like a sunflower. It's frightening, really." The local calligrapher's guild now has about 300 members and her classes at the Smithsonian are now taught by former students.

P.W.Filby, an international authority in the field and a former assistant director of the Peabody Institute in Baltimore, recalls giving a lecture in London five or six years ago and saying there was no decent calligraphy in America at that time. But since then he says, he has seen "marvelous work on this side of the Atlantic, thanks largely to the teaching of Waters and another English calligrapher, Donald Jackson.

"The standard has gone up immensely in the Washington area due to Sheila," says Fibly. "When she came here it was perfectly obvious to everyone that we had the best calligrapher in America."

Waters continues to teach in the basement workshop of her home. Students from Florida, New York and Hlinois - a few camping out in her backyard - learn that the business of writing begins with the mastery of letters.

After a day of teaching, Sheila Waters would return to her manuscript of "Under Milk Wood," almost two decades in the making. She'd been dragging her feet lately, she admits, until her client in London wrote last, fall. He was turning 70, he said. Could she hurry? So she did.