ON THE EVE of the centenary of his birth, Igor Stravinsky, whose work during his lifetime was often controversial, is once again a center of controversy, this time legal. The argument revolves around the disposition of the manuscripts and papers the composer left behind.

Last month a Manhattan judge ordered that the Stravinsky archives be sold to the University of California at Los Angeles despite a 25 percent higher cash offer by the University of Texas at Austin.

In what several attorneys said was an unprecedented decision, and one that left the composer's children bitter, New York County surrogate Millard L. Midonick held that, in this instance, scholarship and art--and the preservation thereof--had higher standing in court than financial matters. "Though a relevant consideration," he wrote in the decision, "the amount of the cash payment is not a compelling factor or an overriding one because of the nature of the assets as a national treasure and the importance of ensuring their proper use and place in the future study of musicology."

Midonick's decision could have broad implications for libraries, archives, educational institutions and museums, which are constantly engaged in acquiring new works. Among the issues raised:

* Where do the rights of the heirs of a great artist stop and the rights of the public begin?

* Will the specter of being a "national treasure" hover over sales of art collections and manuscripts making the market less free?

* Do museums and libraries, many of which are the private preserve of scholars, have an obligation to make sure that their collections get the widest public use?

The importance of the Stravinsky archive is unchallenged. In addition to original manuscripts of the man who is arguably the greatest composer of his time, the collection contains letters and other documents relating not only to his music but to the development of 20th-century art.

By all accounts the collection is now decaying in the Fifth Avenue apartment of Stravinsky's widow, Vera. One farfetched estimate of the worth of the archive, submitted to the court, was more than $80 million; more conservative and reasonable estimates range from the $1.5 million offered by UCLA to one of about $14 million.

There has never been competitive bidding for the archive. The controversy is between Stravinsky's children by his first wife and his widow, who was his second wife. The Stravinsky children and one of the estate trustees wanted to accept a $2 million offer from the University of Texas at Austin. Vera Stravinsky and the other estate trustee preferred to accept an installment plan totaling $1.5 million from UCLA. The deadlock had to be broken by Surrogate Midonick.

Midonick, a highly respected judge, relied heavily on the court's music expert, Professor Edward Hugo Roesner of New York University, who favored UCLA in making his decision. Midonick decided that because of the historical and scholarly value of the papers, money was not the overriding concern in the disposition of the estate.

"Even if a purchaser were to offer $20 million for these archives and manuscripts with the intention that the purchaser would then destroy these papers," he wrote, "this court would not and could not approve of such a sale."

The trustees, he ruled, could not sell to the highest bidder, but only to the bidder whose use of the archive would best serve the national interest. Midonick ruled in favor of UCLA because its music department is "extraordinarily strong" and because Stravinsky lived in Los Angeles: "Given the general association of the man with the area, this would seem . . . to be an appropriate and fitting place for the papers to go." Stravinsky's two children living in America were outraged.

"I don't think it's right," said Milene Marion, 68. She was particularly upset by a demand from UCLA that as part of the purchase agreement, Stravinsky's children will be required to lend their names to fund-raising efforts on behalf of the archive.

"I cannot accept this," said Marion. "They are going to use our names--all this without our consent--so that funds can be raised to be used to pay us for our father's archives. And the money they offered is nothing compared to the worth of the archives.

"I don't think the judge can force us to make the deal," she said. "When we have the contract to sign, nobody can force me to sign it."

Asked if the greater amount in the University of Texas offer was a factor in her reluctance to accept the UCLA deal, she said, "It is, in a way. Everybody needs money. But it's equally important that my father's name and archives get a place and dignity they deserve . . . and UCLA is not the right place."

As for claims made in court by UCLA that Los Angeles greatly enhanced Stravinsky's reputation and by supporting him helped create his career there, his daughter said, "It's ridiculous. Why do they say such a thing? It has no dignity."

She said that "when my father lived in Los Angeles for about 3 decades--until a few years before he died I heard him make so many criticisms of UCLA. He said, 'Those people at UCLA are like peasants and they don't know anything. They don't understand me.' . . ."

Further, she pointed out, "You know, my father was not at all a sentimental person. When he was dealing in business or arranging contracts for music commissions he would always take the one who offered the most money. He was very much money-minded."

The daughter said she favors appealing the surrogate's decision.

"It's very sad, but what can you do?" she said. "You have to fight--though we hate to fight--but when things are dishonest and not right, there is no other way. We have no choice."

Soulima Stravinsky, at 71 his father's younger son, said, "I'm sure my father would not have approved of UCLA. No, we have to fight and get back what we can. And it's not easy."

He called the court's decision "morally wrong and historically wrong."

He said that money was a factor not just as a part of his inheritance but because the University of Texas has much more money "to guarantee to maintain the archive and keep it with dignity and public utility for years to come."

Asked if he will cooperate with UCLA and lend his name to the university's fund-raising efforts, he said, "The answer to this incredible proposition is a total, capital no."

The third surviving offspring, Theodore, was in Europe and was not reached for comment.

Vera Stravinsky, through her attorney, said she was "overjoyed" about the UCLA victory.

But beyond the bitter feelings in the Stravinsky family the case has caused concern among those who make their living administering institutions involved in the pursuit of manuscripts and those who are involved in selling them.

The decision was termed "odd," "puzzling" and "antipathetic to most of our law" by some administrators.

Larry Dowler, acting librarian of the Beinecke Library at Yale University, was "stunned" by the decision. "On the one hand I'm happy that something other than money was a determining factor. But it's mind-boggling that UCLA would have been chosen over Texas, which is a major research library, especially when Texas was offering half a million more."

He said he had "ambivalent feelings about the curtailing of the free market factor." He didn't want to see a situation where the well-endowed Beinecke would be "competing with the Library of Congress," which has little money for new acquisition, for a set of papers and the Library of Congress won "because it better served the national interest."

The Library of Congress would not comment on the decision but prepared a statement that recalled Stravinsky's former association with it. It was regrettable, read the statement, "that Mr. Stravinsky, because of the operation of the 1969 amendments to the tax code, was unable to determine what institution would be recipient of his papers. The Library of Congress had a long and close association with Mr. Stravinsky . . ." who gave some of his manuscripts to the Library when such donations qualified for a tax deduction, prior to 1969. "Without the operation of the 1969 act, the papers would surely be at the Library of Congress."

A local museum administrator who spoke off the record said that the decision "runs counter to American attitudes of the past." He pointed out that relative to other countries, the United States has "extremely free trade in the arts." He referred to the case of Ben Heller, who sold a Jackson Pollock painting to an Australian museum. "He would not have been constrained if an American museum offered him a smaller price."

However, there were those who did not believe the decision was precedent-setting. Stephen Weil, a lawyer and deputy director of the Hirshhorn Museum, said after reading the ruling, "There is less here than meets the eye. The judge was acting more in his capacity as a referee." Then he added, "I was disappointed. It would have been an exciting piece of legislation. The perfect case would have been an institution less good than Texas offering more money."

The sale to UCLA is far from concluded. Before the court's decision, Dean Robert Gray of the UCLA College of Fine Arts said, "If all of the family and heirs are not in agreement that UCLA is to be the archive, then we would not be interested in accepting" the documents. The heirs, clearly, are not in agreement.

Meanwhile, as the archives continue to decay, Decherd Turner, director of the Humanities Research Center at the University of Texas at Austin, has made an offer of scholarly mercy that has so far been scorned.

Turner said his university is willing to take temporary custody of the documents and immediately institute preservation procedures until completion of the sale and any appeals of the court order. At that time whatever institution has purchased the documents would receive them from Turner without cost for the preservation procedures.

In the meantime, the complications surrounding the case grow thicker. A protest has been lodged by George V. Bobrinskoy Jr., the attorney for the two Stravinsky children living in the U.S. He claims to have secured files of internal UCLA documents which, if valid, suggest irregularities in the pursuit of the archives by UCLA.

He wrote Midonick saying, "These documents strongly indicate that a fraud has been committed upon the court." The surrogate did not act on the letter.

Midonick retired from the bench shortly after making his decision. Veteran probate court observers suggest that with this case transferred to a new judge, it may drag on for many more years.