Imagine a school district where the leading two or three candidates for every principal's job are required to be interviewed by the school's parents.

Or a school where a parent with an advanced degree volunteers to run the library, and the money saved is used to bring in actors and dancers to teach classes to students.

Such a scenario could be possible under a long-range restructuring of the Fairfax County school system tentatively approved by the School Board at its annual retreat last month in Fredericksburg, Va., and scheduled for final approval June 26.

The plan was unveiled at the meeting by Fairfax County School Superintendent Robert R. Spillane and is among his biggest initiatives since he took office a year ago.

Known by the formal name of "school-based management," the plan would give principals -- assisted by teachers and parents -- much greater control over decisions on budget, hiring, textbook selection, curriculum and other issues.

The idea is based on the belief that people involved with neighborhood schools are often better equipped to make decisions about them than a central bureaucracy -- and that there is more accountability on the part of principals for changes in student achievement at individual schools.

Advocates say that school-based management improves morale of school staff, behavior of students, and confidence of parents by giving them a personal stake in the institution. There is no research available to prove that it increases student achievement, but backers say it cannot hurt.

"No institutional decision can ever replace . . . common sense at the local level," said Spillane. "There's a spirit that 'we' are doing this . . . . The parents feel ownership."

Spillane cautioned in an interview, however, that such a plan would take years to implement because it is a huge undertaking that would require extensive staff training.

Even after schools are given more control over their own affairs, the superintendent said, the central school office would continue to set achievement goals, monitor schools for compliance and retain veto power over major decisions.

School-based management would represent a radical change of direction for Fairfax County. Officials say privately that some principals might be unable to handle the increased responsibility and therefore would not be able to keep their jobs.

The Fairfax school system is so big that it has not only a central office but is divided into four areas, each with its own headquarters, to oversee the education of 125,000 students in more than 160 schools.

Yet the School Board votes on comparatively minor matters such as adding a class period to the end of a day at the new science and technology high school, or approving a pilot project to keep a school library open during evening hours.

School Board member Kohann Whitney said the change of direction would allow the board to focus on "the big picture," not on "state-of-the-art mimeograph machines," a reference to the board's inspection of a new duplicating machine during public hearings on the proposed 1987 budget.

Other School Board members, parent groups and the president of the county's largest teacher association share Whitney's enthusiasm -- with some significant reservations.

"It has great potential," said Donna Caudill, president of the Fairfax Education Association, who praised the concept because it would give teachers a bigger voice in decisions about their schools. She said the program would require better-trained administrators and a clearer description of mission -- "what we're supposed to be doing in the classroom."

Principals would get more training in administration and teacher evaluation -- half will have finished a training institute by the end of next summer -- but school-based management also would expose them to more criticism if they fail. "Everyone needs to have a desk at the school that says: 'The buck stops here,' " Spillane said.

Spillane envisions a phase-in period of three years or more before school-based management is more than a pilot project. But he said, "If someone's ready to start in September, you might see several schools getting involved."

Nationally, the school-based management movement is about a decade old, said Carl L. Marburger, a former New Jersey state school superintendent who now is a senior associate at the National Committee for Citizens in Education in Columbia, Md. One of its foundations is research showing that a strong principal is the key to a good school.

The concept has been tried in schools in St. Louis, New York City and Boston, where Spillane was superintendent before coming to Fairfax County last year.

Marburger said Fairfax County would be the largest system in the nation to have school-based management in all its schools. He said Howard County, Md., also is investigating school-based management.

Under most school-based management plans, a council of parents and teachers advises each school principal on major decisions. The principal has the final say, within constraints set by the school system.

"It's not total independence," Spillane said. "We need to know what they're doing. The School Board will set long-range goals and priorities. We will as a central office set system-wide objectives. I'm not going to tell you the principal how to achieve these objectives."