British actress Julie Walters is today's fair lady, star of "Educating Rita," a charming, liberated "Pygmalion" based on the Piccadilly stage play by Willy Russell, who also wrote the sparkling screenplay.

Walters plays a Liverpudlian hairdresser who wants a degree of knowledge, but not from a cosmetology college. And Michael Caine, who fefeon 30 pounds for the occasion, plays Frank Bryant, Rita's unwilling Henry Higgins, a pickled professor and disillusioned poet. Theirs is an amusing partnership that radically changes her life and his.

Rita is trying to break through the confines of the British class system by attending Open University. There she meets the cynical Professor Bryant and persuades him to take her as his student. Little by little, she becomes an upperclassman. Changes occur in her Liverpudlian voice. It gets tenser, tonier. Little by little, the tight skirts disappear in favor of baggy jeans and sweaters. Finally she leaves her husband and quits her job in favor of becoming a practicing intellectual.

Frank, the fallen idealist, mourns the lost beauty of Rita's street smarts, the getting to the truth of things without slathering it all over with literary allusions and illusions. He blames himself for destroying her unique mind, and she blames him for ruining his with alcohol. He's transformed when she wises him up to his own self-serving drunkenness, his whining, wasted life.

The film offers a buoyant, joyous performance by Walters -- "She was born to play the role," says producer/director Lewis Gilbert -- with a supportive, tangy one by Caine. Their amusing teamwork is aided by Gilbert's need to nurture actors after completing three enormous high- tech projects such as "Moonraker" and other Bond adventures.

"Educating Rita's" original two-character structure was expanded by playwright Russell, who was still working on the play when he met its star, who helped flesh out her character. For the film, it goes outside the confines of the professor's study and suffers some from the transition. Characters and situations that were described on stage now become real, but they're never really developed. They have a shallow and extraneous feeling. Yet, as Caine points out, "In a movie, the first thing you don't do is come in and say, 'I've just been in a Zeppelin crash.' " You've got to see it.

"Educating Rita," thoughtfully paced -- what some people might call slow -- is geared to the educated viewer. After all, such lines as "Wouldn't you just die without Mahler?" aren't very funny if you have to turn to your seatmate and ask, "What's Mahler?" And they say, "Nothing. What's the Mahler with you?"

Lovely "Rita," let her be a lesson to you. EDUCATING RITA -- At area theaters.