"Ought we to be drunk every night?" Sebastian asked one morning. "Yes, I think so."

Bookstores in Oxford still sell thousands of copies each year of "Brideshead Revisited," Evelyn Waugh's story of 1920s student life among the children of Britain's rich and pedigreed at the famed university. Like the gray medieval walls and the river punts, the whimsical and ultimately pathetic debauchery of the fictional Sebastian Flyte and the "Oxford set" over which he reigned have become part of the university legend.

But fiction turned disturbingly into reality at Oxford University last week, and it seems there is little whimsy in the 1980s version of the Oxford set.

At 8 last Wednesday morning, police were called to Christ Church, one of the most renowned and prestigious colleges of the university. There, in the student rooms of Count Gottfried von Bismarck, the 22-year-old great-great-grandson of Prince Otto, Prussia's famous Iron Chancellor, they found the body of a young woman lying dead in a pool of her own vomit.

The woman was Olivia Channon, also 22, the daughter of Paul Channon, a member of Prime Minister Margaret Thatcher's cabinet as secretary of trade and industry and a man of inherited means. A preliminary post-mortem indicated that she had choked while unconscious from the effects of alcohol and drugs.

The next day police arrested her cousin, Sebastian Guinness, scion of the Guinness banking and brewery dynasty, and her best friend, Rosie Johnston, of a well-known British publishing family. Both have been charged with possessing heroin, and with supplying it to Channon.

According to subsequent police accounts, Channon and her friends had just finished their exams and had spent Tuesday night "thrashing," the Oxford term for drunken revels marking the end of spring term. In all, eight young people had been present at a party in Bismarck's rooms. All, including Bismarck, claimed to have left to go to other events during the early morning hours, leaving Channon alone, apparently passed out on Bismarck's bed.

Police now have centered their investigation on tracking the supply route of heroin and other drugs into Oxford, and reportedly are searching for a particular, unnamed drug dealer in London who is thought to service the Oxford University market.

Beyond the official criminal inquiry, the sad circumstances of Channon's death have captured Britain's attention and imagination to a degree that may not yet have reached level of the Profumo scandal, but certainly outranks Prince Andrew's dalliance with soft-porn starlet Koo Stark. As it is described in daily salacious detail by the sensationalist tabloid press, and probed for sociological significance by the more weighty media, it is a story that has something for everyone.

For those on the lower end of the social scale who claim to hate the British class structure, it is proof that the children of the rich and powerful are no more admirable than their parents. Those who particularly have it in for the leaders of Thatcher's Conservative Party have been handed a new weapon for their arsenal, and are attacking the Tories for both lax handling of the drug menace and packing the legendary university with profligate wasters at the expense of the studious proletariat.

Each day's headlines add a new name to the list of well-known Britons whose progeny are said to have been part of the "set" that revolved around Bismarck. One, Viscount Althorpe, the brother of the princess of Wales and known in the tabloids as "Champagne Charlie" for his well-chronicled party manner, denied having anything to do with drugs. He had telephoned Channon just hours before her death, he said. She sounded fine, and happy to be finished with her tests.

According to the Sunday Times, others inside Bismarck's crowd include Lady Antonia Fraser's son Damien Princess Charlotte of Luxembourg and a host of daughters and sons of various other lords and ladies and members of Parliament.

Bismarck himself is described as a rich and elegant young man with a somewhat macabre sense of fun. According to one press account, in Rupert Murdoch's News of the World, Althorpe was the guest at one Bismarck repast, modeled on a Bavarian hunting party, at which two severed pigs' heads were strung up above the banquet table, dripping blood all over the food.

The same article features a photograph of the gaunt, fair-haired Bismarck dressed as a nun. According to News of the World, "Von Bismarck is a leading member of Oxford's Piers Gaveston society. It was originally an all-gay group and the rules say members have to dress in drag and parade openly in public."

Competition for bizarre photographs of the Oxford set and titillating information about their habits is fierce on Fleet Street, traditional home of Britain's national newspapers. Headlines on Friday and Saturday centered on a supposed suicide note, written by Channon to Rosie Johnston last March during troubles with her boyfriend and found by three journalists rummaging through a trash can behind the Channon family home.

The family dismissed the note as the normal ramblings of a young woman in temporary romantic distress three months ago rather than a reflection of any recent state of mind. In what was perhaps an indication of the kind of world in which the rich live, the Channon family solicitor issued a press statement insisting that Channon could not possibly have been contemplating suicide. Had she been, he said, "I believe she would have contacted me . . . to talk about her will."

Among the rich and powerful, and those who exist within their aura, the Olivia Channon case seems to have caused profound unease. Sociologists and professors have written commentaries attributing the fatal, fast-track life style of Channon and her friends to broken families, years at boarding school, too much money and parents with too little time for affection.

For the elders, there is the anxiety that comes from discovering that their offspring are not immune from social ills, like drug abuse, that they tend to associate with the lower classes. Ever since Channon hit the headlines, London dinners and early summer garden parties have been buzzing with the talk of concerned parents who, while proud of their children's easy entry into the high-flying Oxford crowd, are nonetheless certain that they would never think of touching hard drugs.

There is little question, however, that hard drugs are fast becoming a problem in Britain, and that heroin is the drug of choice for the young. It is far more accessible than marijuana and far cheaper than cocaine. An evening of heroin use can be easily bought on many London streets -- and apparently many in Oxford -- for as little as $10 to $15.

Few young people -- rich or poor -- inject the drug. Most prefer to "chase the dragon," which involves burning heroin on a piece of tinfoil and inhaling the fumes. According to police and drug abuse experts, most users erroneously believe that dragon-chasing is a less harmful use of heroin and is nonaddictive.

Over the past two years, there have been increasing press accounts here of young deaths from drugs. Thatcher's government, despite the charges of political opponents, has in fact set in motion a massive campaign against drug abuse, and stepped up police efforts against drug importation. Last year, the young Marquis of Blandford was sent to jail for cocaine trafficking. Last month, British international cricket star Ian Botham publicly confessed to smoking marijuana, and has been suspended from play for the summer.

To many of Sebastian Flyte's student generation, the movers and shakers of today's Britain, life used to seem much simpler. "Oxford was then a place where the everyday machinery of social life was lightly lubricated with alcohol," wrote alumnus Godfrey Smith in Sunday's Observer. "Drink was the supreme catalyst. It melted ice and loosened tongues. It was, it seemed to us, a necessary and pleasant adjunct to civilized life. It turned the wheels."

But times have changed, and what gin and bubbly did for one generation, heroin now does for another.

In interviews published over the past several days, numerous current Oxford students have decried the Brideshead image, the picture of licentious life and little attention paid to studies, as representing only a small minority of the student body. The publicity surrounding the Channon case, according to the editor of a campus newspaper quoted in the Sunday Times, "has put back the work of the students' union, which tries to get people from a broader background. We have struggled in this union to ensure admissions are made on a more egalitarian basis."

"No one has denied that Oxford is intellectually elitist," said editor Ann McElroy. "What we are trying to fight against is the Bismarck image. Now what we have got is something that bolsters that image -- a 1980s version of Brideshead."