An acute awareness of the fluidity of reality is a quality with which novelist Lawrence Durrell is lavishly endowed. In "Livia" he shares this gift generously, and sometimes bewilderingly, with his readers.

The plot of "Livia" - such as it is - focuses on the activities of young English expatriates living in southern France during the late 1930s. These activities include a swirl of love affairs, a search for lost treasure, dubious financial dealings, much discussion of ancient herresies and midnight orgies. Notwithstanding these exciting pastimes, "Livia" is pervaded by a sense of loss, of sickness, of menace closely related to World War II and to the shady figure of Adolf Hitler, who never comes on stage but looms often in the background. He is one of many strands woven into a rich tapestry that embodies, finally, the soul of a generation.

Still, Durrell's novel is not really about the approach of war, the city of Avignon, the lost treasure of the Knights Templar or any other of its ostensible subjects. "Livia" is really about the unfortunate human tendency to love the wrong people, the wrong things.

It is also a sequel of sorts to Durrell's earlier novel, "Monsieur," and the second book of five, which he is calling a quincunx (an arrangement of five objects with four forming the corners and one in the center). It is onlya sequel "of sorts" because the two books concentrate primarily on two different groups of people who should not, strictly speaking, exist in the same time-space framework - the characters of "Monsieur" seem to be, more or less, inventions of Aubrey Blandford, who is a major character in "Livia." To make things more confusing, Blanford is a minor character in "Monsieur," but his presence is notable only at the end, when the novel proper is really completed. He is the putative author of "Monsieur," but when he discusses the manuscript of his book with a friend, the book under discussion sounds much more like "Livia" than "Monsieur."

It all gets quite complicated if you try to keep score.

In "Livia," Robin Sutcliffe, an imaginary novelist invented by Blanford, complains to his creator about the rather showy and banal suicide he had thrust upon him (apparently - there are other possibilities) in "Monsieur." Inn this as in other details, he shows in an extreme form a tendency found also in other Durrell characters-a penchant for getting away from their creator and living lives of their own.

For example, the names and a hint of several central characters from "Monsieur" can be found in "Livia": Sutcliffe and his disastrous wife Pia most prominently; Piers, Bruce and Akkad less obtrusively; and poor mad Syllvie, not by name but in a vivid description that makes her totally recognizable, when Blanford runs into her by accident. Except for Blanford and the two women he loves, characters from "Livia" have had less risk infiltrating "Monsieur," perhaps partly because they came to life in the four years since that novel was fixed in print.

Other than the characters, the two novels have various themes in common, including an interest in Gnosticism, an preoccupation with Avignon and Egypt, morose brooding over the fate of the Knights Templar, their heresy and their still-hidden treasure-above all, a concentration on the intricate knots and subtle self-deceptions in which people become involved when they love one another. Although their separate identities are anything but absolute, either novel can be enjoyed without reference to the other. But when they are read in conjunction (perhaps regarding "Livia" as an account of the raw materials from which a novelist such as Blanford might have written a book like "Monsieur"), their mutual resonances become fascinating.

All of these intricacies would be a waste of time, of course, without content worthy of such elaborate literary artifice. But Durrell's account of how a group of young Englishmen and women work their way to self-knowledge through disastrous mistakes in the years before World War II is perceptive, funny, often very touching and presented in a prose style that is both graceful and powerful.