Paula Jane Hurley has a 3-year-old mind in a 16-year-old body. She is a severely retarded adolescent who cannot speak, cannot read or write, and is only now learning to control her bodily functions.

She doesn't know it, but she is smack in the middle of a legal storm that comes to a head today in a Fairfax circuit court trial. It pits the county school board against her parents in a clash of competing philosophies of special education.

Fairfax County, which pays about $8,700 a year for Paula's education, has been trying for the last four years to transfer her from a private residential instutition in Maryland to a daytime public school for the retarded in the Tyson's Corner area. The county argues that Paula's current school is too restrictive, and fails to prepare her for daily life in the outside world.

Paula's parents and teachers, on the other hand, say that she has made considerable progress at the residential school, and that she needs the constant supervision and expertise of a 24-hour program. They fear that Paula would regress if she were transferred to a six-hour-a-day school such as the one the county suggests.

The county, which already has lost twice in reviews by the Virginia education department, relies on a Virginia law stipulating that retarded children be educated at the "least restrictive, appropriate" institution.

Paula's parents, who moved to McLean from New Jersey four years ago, cite evidence from a spate of experts that a residential institution is the only appropriate setting for Paula. They are pleased with the progress Paula has made in sign language and behavior since they first sent her to a residential institution five years ago at the urging of their local school board in New Jersey.

"It was a traumatic experience for us to send her away to school at first," said Paul E. Hurley in an interview last week. "We are a close family and we did not want to send her away."

"But now she is secure, she's happy, and she's progressing more than we ever expected her to," added Rae Hurley, Paula's mother.

The school board's suit against them has baffled and upset the Hurleys. They say they cannot fathom why the county is pursuing the case with such fervor -- at a cost of thousands of dollars to both parties -- when so many experts have supported their positions.

"I wonder why I ever moved the Fairfax County," said Paul Hurley, who was transferred here as technical director of the Malaysian Rubber Bureau in 1977. "This has been an emotionally draining experience. This is major litigation over something that shouldn't be major litigation. I mean, it's just not right."

Rae Hurley's voice cracked as she started to speak.

"Why, why, why, why?" she asked beseechingly. "Why pick on Paula Hurley? Why make Paula Hurley and issue of this intensity? Are they really interest in Paula? Should my child's education be disturbed?"

Fairfax County, for its part, is rather terse about the case. School division officials refuse to comment on the case, and refer all questions to their lawyers.

"The only issue is what's appropriate," said Ann W. Mische, an attorney representing the school board. "You're not looking at the relative merits of a program -- whether one's better than another -- you're just concerned with the question of appropriateness."

"Whenever the school system feels it can provide appropriate education in its own facilities," said Thomas J. Cawley, another school board lawyer, "it has an obligation to do so."

There are six other severely retarded children from Fairfax in residential institutions, according to the school board. It is unclear how a ruling in favor of the county in the Hurley case might affect these students.

There does not seem to be an issue of education cost involved in the case.Legal papers filed in the case show that the cost of the two institutions is roughly the same.

Dr. Christopher Owner, principla of the Kilmer Center in Vienna, where the county would like to place Paula, said school board lawyers had instructed him not to speak with the media about the case.

But a deposition of file at Fairfax circuit court provides a glimpse at the county's rationale for wanting to transfer Paula.

In the document, Owner maintains that the Benedictine School for Exceptional Children, located about 20 miles east of the Chesapeake Bay Bridge, in Ridgely, Md., where Paula has been enrolled since 1977, stresses close wupervision and one-on-one instruction at the expense of teaching Paula to deal with the outside world.

There is no "option to take a skill out of the classroom in which she's learning it and then generally apply" that skill, Owner said in the deposition. While Owner acknowledged the value of the communication program at Benedictine, in which Paula has learned to use about 50 signs spontaneously, and respond to another 180 or so, he criticized the overall course as "custodial."

Paula must learn to function on a "less than one-on-one basis," Owner said.

Other experts familiar with Paula's case disagree with Owner's assessment, however, and argue that for a child with an IQ of about 30, there will always be a need for a structured and supervised environment. They warn of the danger of regression if Paula enters a six-hour-a-day program like that offered by the Kilmer Center.

"We don't feel that Paula will be able to adjust to such a change" as being transferred to the Kilmer Center, said Sister Jeanette Murray, the director of Benedictine. "We know she won't. So why take the chance?"

Murray also stressed that since Paula is one of the most severely retarded children at Benedictine, she has "good peer models" to imitate, while at Kilmer Center, amny of the students are just as retarded as Paula.

"To take Paula out of an environment where her own self-image has improved, where she has made the first significant success of her life, is just not right," she declared.

Murray and other educators at Benedictine emphasized that Paula's parents do not have the expertise needed to ensure her continued progress.

"Right now," said Nancy M. Thornton, educational director at Benedictine, "she is a far more active person than when she first came here. Based on where she was and where she is now, in some areas there would be definite regression in Paula's overall ability to take care of her personal needs if she were in a day program like Kilmer."

Benedictine officials and the Hurleys also say that Owner has acknowledged that the Kilmer Center, which has about 200 students, was overcrowded last year. School board attorneys said they had no comment on the matter.

In a letter last week to John F. Jerrity, chairman of the Fairfax County Board of Superivsors, the Hurleys complained of "cruel and discriminating treatment by the Fairfax County School Board."

They charged that the cost of the suit to Fairfax County "must also be staggering, as much as, if not more than, what it would cost the school board to fund our daughter for her remaining five years in residential placement."

County scholl officials refused to comment on the cost of the litigation, and lawyers for the county said the information was not readily available.

"The school board says they'd like to show that they can do this -- that they can educate a child like this using their own methods," said Paul Hurley. "But why take the chance? Do they want to experiment with her? I won't permit it."