After more than 50 years, the menu at the White Palace Cafe and Restaurant in Purcellville, Va., has been changed.

The menu still exists, with its 1940's prices--$2.25 to $3.95 for complete dinners, including two vegetables and slaw--but not at the White Palace.

It moved across the street with George, the Greek immigrant who quarreled with his younger brother a year ago and took the menu, waitresses--and most of the customers--and opened George's Plaza Restaurant 25 yards away.

For a year it was a cook-out across Loudoun County's Rte. 7, George Kakouras and brother Tom competing with the same menus and prices for the hearts and appetites of Purcellville, population 1,567, which is about 40 miles northwest of Washington. Three months ago brother Tom cried uncle and sold his lease to "Mike, an Italian guy from Brooklyn," as residents say. Tom went to Greece.

Mike Licausi struggled for more than a month trying to compete with George following the White Palace menu and keeping its modest prices and its traditional hours--5:30 a.m. to 9:30 p.m. Finally, an exhausted Licausi shook the town: He turned the 50-year-old Greco-American White Palace into an Italian restaurant that now opens at 10 a.m. with higher prices.

The White Palace was not given stars or mentioned in restaurant guides, but its word-of-mouth reputation regularly brought in tourists off the interstates--and has left them full and astonished at the bargain prices. And under the extended Greek family that has run it since the 1920s, the White Palace became a daily town meeting hall, an informal town council, planning commission and courts in session--continuously from opening till closing.

But with two choices, people in Purcellville have taken sides, first preferring George's Plaza to Tom's White Palace and so far George's place to Mike's. "I've been coming to the White Palace . . . and now to George's since I was 14 years old, and now I'm 40," said Russell Powell, a town auto mechanic. "Mike's a real nice guy, Italian food. It's okay. But George's is a tradition and this is a close-knit town."

Others, like Police Chief Jim Leake, approach neutrality. He's been to the real White Palace--now called "the new restaurant" or "Mike's" by most residents since the name White Palace still is associated with George. "It's real nice," Leake said. "Mike's gonna do good . . . There's room in town for him."

But Leake, who has stuck to a similar routine for the 20 years he's been on the police force, is a regular at George's Plaza Restaurant, where he eats breakfast, and often lunch and dinner. During the day, he drops by for coffee.

"I got my police job at George's," Leake recalled. "I was sitting having breakfast . . . I was working at the farmer's coop at the time . . . and the mayor and the police sergeant came in and said, 'You're going to work for the town.' I've been coming ever since, for the food, friendship and the news . . . You learn about what's going on faster here."

Mike is getting curious local customers as well as tourists who come seeking the legendary White Palace, not knowing it is under new management. "This is the White Palace," he said. "This is where they've been coming for so many years. The town sticks to tradition." Besides, Mike said, he makes good food. "George's is good plain food," he said. "Mine is more seasoned . . . something they may or may not have tasted before."

People around Purcellville also seem to eat out a lot, Mike added, leaving room for his restaurant. "Maybe with the prices at these restaurants it's cheaper than buying groceries," he said.

Besides the ubiquitous McDonalds and a Holly Farms, there are two other restaurants in town, both located, like almost everything else in Purcellville, along Rte. 7. There is the Purcellville Inn, which describes itself in a Loudoun County guide as a "white linen" restaurant and Legard's Barbecue, which briefly made Purcellville famous when owner Sam Legard took his barbecue ribs to the Super Bowl to bring the Washington Redskins good luck.

But the big name and, until last year, the busiest restaurant in Purcellville was always the White Palace. The decaying, dirty-white building, that looks like something from New Orleans' French Quarter, is about as appropriately named as George's Plaza. There is no plaza in Purcellville. "One of my customers said Plaza was a good name for a restaurant," said George. "And another said, 'Why don't you put your name in it?' "

George took few things with him when he left the Palace, beside the menu, popular waitresses and a loyal following: a water-stained calendar print of Robert E. Lee, about as common in rural Virginia as Castro photos in Cuba, and the globe of the world that two customers bought in the 1960s when they had an argument over where South America was in relation to Purcellville, said George.

The ancient counters and booths remain in the Palace, as does the old eight-day wind-up clock from Hodgson Jewelers, Winchester, Va.

Even a few relics from the menu, with modest prices, have been kept in Mike's new Italian restaurant, including beef liver and fried haddock.

Said Mike, "I didn't want to shock the town and change things too much."