The historical reputation of Josip Broz Tito, one of the most colorful of 20th century leaders, seems ripe for reassessment.

It is now five years since the death of the Moscow-trained Communist who led a guerrilla uprising against German occupation and went on to win a trial of strength with the Soviet dictator Joseph Stalin.

Here in the Alpine surroundings of Lake Bled, where Yugoslavia's pre-war kings retreated for the summer, Tito's old villa has just been reopened as a luxury hotel. Well- heeled tourists wander through marble halls decorated with frescoes of Yugoslav partisans blowing up Nazi tanks in World War II and Amazonian women laboring to reconstruct a devastated country.

Elsewhere in Yugoslavia, productive uses are gradually being found for the chain of palatial residences specially constructed for Tito. Some have been turned into museums. Others have been handed over to the local authorities as villas for distinguished foreign visitors.

The "de-Titoization" process may not have been as startling as the political upheavals that took place in Spain after Franco or China after Mao. But to a foreign journalist returning to a country that he knew well while Tito was alive, the changes are nonetheless dramatic.

Tito's political heirs have discovered that they have inherited a potentially explosive combination of economic strains, popular discontent, and national unrest.

The political atmosphere is freer now than it was five years ago but, in material terms, Yugoslavs are much worse off. People grumble more openly than they ever did before. Cursing the government has become a way of life. There is a widespread mood of disillusionment and frustration, as if the country is sinking slowly downward while the politicians argue among themselves.

Most noticeable of all is the way Tito himself seems to have faded into history. To be sure, his fatherly portrait continues to gaze down from hundreds of thousands of office walls and his tomb in Belgrade is still a place of pilgrimage. But his personality and historical achievements no longer seem all that relevant to modern Yugoslavia's many problems.

"Tito's authority has been declining," remarked Mihajlo Markovic, a dissident philosophy professor at Belgrade University. "People understand that he left behind a system that cannot function. Increasingly his name is not mentioned or, when it is, nobody reacts."

In order to maintain the delicate balance between the country's many different national groups, Yugoslavia is now ruled by a collective leadership. Decisions are taken by consensus following a lengthy process of consultation involving leading politicians in the six republics and two autonomous regions that make up the Yugoslav federation. It is almost a recipe for perpetual political stalemate.

"There is a political vacuum. Nobody has tried to replace Tito. If anybody did, it would be a farce," commented Dusan Biber, an historian from the northwestern republic of Slovenia who fought with the partisans during the war.

The mood of ordinary people was captured in a plaintive letter to the Belgrade weekly Nin a couple of weeks ago: "People have begun to lose confidence both in each other and in a political leadership which either is not able to implement its own decisions and resolutions or implements them very slowly. People are losing hope."

Inflation has reached South American proportions as the government struggles to pay back foreign debts of more than $22 billion accumulated in the last decade of Tito's rule. Unemployment is rising, particularly among young people. Living standards have fallen steadily and are now back somewhere at the level of the mid-'60s, in the opinion of many economists.

Under pressure from the International Monetary Fund and western banks, Yugoslav leaders have imposed a package of austerity measures. But they seem unable to agree on radical political or economic reforms.

The roots of Yugoslavia's present crisis go back to the aftermath of the First World War when the country came into being as the Kingdom of Serbs, Croats, and Slovenes.

The new state lay at the crossroads of East and West -- straddling the border between Islam and Christianity, Byzantium and Rome, Turkey and Austria-Hungary.

Uniting the South Slav ("Yugo-Slav") nations after so many centuries of separation proved a difficult task. The Orthodox Serbs, who had boasted their own independent state for more than a century, provided Yugoslavia with its royal dynasty. Their political predominance was, however, contested by the Catholic Croats who have historically regarded themselves as the defenders of European culture and civilization.

The experiment ended with the dismemberment of Yugoslavia by Hitler in World War II and horrifying ethnic massacres that stand comparison with the present bloodshed in Lebanon. What followed was in effect a civil war and war of national liberation rolled into one that cost the lives of nearly 2 million people -- a higher percentage of the population than any other country except Poland.

After the war, Tito's victorious partisans sought to reconstruct Yugoslavia on a new basis. Preaching a slogan of "brotherhood and unity" between the different South Slav nations, they set up a federal state in which each republic was granted a very large measure of autonomy. Even the Communist Party was split up into eight different parties, each with its own central committee.

Tito was dubbed "the last of the Hapsburgs" by the British historian A.J.P. Taylor -- not just because of his regal inclinations but also as a tribute to his skill in ruling over a hotchpotch of different nations and bringing stability to a part of the world that used to be known as "the tinderbox of Europe."

Yugoslavia's new rulers emphasize Tito's enormous merit in becoming the first communist leader to stand up to the Soviet Union in 1948 -- a historic step that resulted in Yugoslavia's expulsion from the Cominform. They also point to the unprecedented period of stability that Yugoslavia enjoyed under Tito's leadership.

"Our political system is a young one. But it has already demonstrated its strengths, particularly if you compare it to the so-called system of 'real socialism' in other East European countries," said Mitja Ribicic, a former prime minister and Communist Party leader from Slovenia.

While Tito was alive, the system seemed to work well enough. The leaders of each republic inevitably defended their own sectional interests -- but there was always someone to knock their heads together in the event of a crisis. Today, by contrast, Yugoslavia is suffering from a combination of excessive political interference in the running of the economy and a paralysed decision-making apparatus.

"The basic reasons for our economic crisis are political," insists Vojislav Stanovcic, a professor of political science in Belgrade. "We can live with weak government as long as the economy does not suffer. The problem here is that the politicians control the economy."

In retrospect, many informed Yugoslavs now blame Tito for lack of foresight. Most of the ills afflicting the Yugoslav economy and political system can be directly traced to decisions taken during his lifetime.

"Tito was a great politician in the sense that he was brilliant at achieving and holding onto power. But he did not have a clear strategy for leading the country into the modern age. He was old and conservative," said Dobrica Cosic, Serbia's most prominent novelist.

The economic difficulties have coincided with a marked resurgence of nationalism in several parts of Yugoslavia in the five years since Tito's death. In Kosovo, an autonomous province of Serbia, there have been riots by ethnic Albanians demanding their own republic and pressure on Serbs to leave. This in turn has caused a backlash of nationalist feeling among the Serbs who regard Kosovo as the heart of their medieval state.

In the street cafes and restaurants of Belgrade, which is both the capital of Serbia and the federal capital of Yugoslavia, the big talking point this summer has been the so- called "Martinovic affair." A Balkan version of "Rashomon" -- the Japanese film classic that depicts the same crime from a succession of different viewpoints -- the incident provides an insight into the quintessential Yugoslav problem: the relations between the different ethnic communities.

The complicated saga began last May when Djordje Martinovic, a 60-year-old Serb living in the Kosovo, staggered into a local hospital with the remnants of a bottle rammed up his backside. He told doctors that the horrifying mutilation had been inflicted upon him by Albanians while he was working in the fields.

The incident might have ended there, just one more particularly squalid example of ethnic rivalry between Serbs and Albanians. But it took a sensational twist after the local police announced that Martinovic had confessed to mutilating himself -- because, it was suggested, he was a homosexual. Martinovic was then told that he was under investigation for inciting nationalist hatred with false accusations against the Albanians.

Transferred to a military hospital in Belgrade, Martinovic promptly retracted his "confession" which, he claimed, had been obtained under duress.

For his fellow Serbs, Martinovic rapidly became a symbol of all the indignities the Serbian nation has suffered over the past few years, particularly in Kosovo. There was indignant talk about a "coverup" in the Serbian parliament. Some Serbs, including Cosic, have been complaining that the nation has sunk to its lowest point in its long and proud history.

Elsewhere in Yugoslavia, the Martinovic affair was regarded as something of a joke. When a Serbian football team went to play in Zagreb, capital of the republic of Croatia, the Croatian fans burst out in taunting chants of "bottles, bottles," a reference to the injury which Martinovic is alleged to have inflicted upon himself.

In Slovenia, which is Yugoslavia's richest republic and in some ways resembles neighboring Austria, nobody is in the slightest bit interested in Martinovic and his problems. Here political conversation is dominated by alleged economic unfairnesses: the industrious Slovenes complain that their hard-earned foreign currency is being used to subsidize unprofitable industries in the underdeveloped regions of the country.

"Yugoslavia is no longer a single political community with the same issues that excite or divide. Each republic has its own particular concerns," remarked Dragan Boskovic, a commentator on the Slovenian newspaper Delo.

Many Yugoslavs claim that their country has moved away from being a federation -- and has become instead a confederation. One recent study showed that the level of trade between the different Yugoslav republics has been steadily decreasing and is now proportionately lower, in terms of percentage of national income, than trade between different west European countries.

For the outside world, the key question of course is whether the tensions that have surfaced in Yugoslavia over the past few years can be contained or whether the country is headed sooner or later for an explosion. Given Yugoslavia's sensitive geopolitical position, any social upheaval here could have important consequences for both East and West.

There are plenty of alarmist scenarios around. Their point of departure is the assumption that the present stalemate cannot continue ever. Some kind of popular revolt or preemptive strike by the ruling bureaucracy to preserve its privileges cannot be ruled out.

"There are so many potential conflicts here. This country could turn into a Lebanon within a few months," said a Belgrade intellectual.

Yugoslavia's very complexity, however, acts as a kind of guarantee against dramatic political shifts. In a country of half a dozen different nationalities, and even more ethnic minorities, there is no such thing as a unified political class. Nor is there a unified political opposition. The rival nationalisms have a tendency to cancel each other out.

"Workers in Zagreb would never unite with workers in Belgrade," commented Stanovcic, explaining why an all-Yugoslav protest movement along the lines of Poland's Solidarity trade union is impossible to conceive in Yugoslavia.

A much more likely form of protest -- and one that has already been occuring to some extent -- is the passive go-slow. When water supplies failed in the Serbian town of Kraljevo a few weeks ago, there were no public demonstrations. But production in local factories is reported to have dropped by some 30 percent.

"Rebellions happen in times of prosperity. These days people rebel in a way that is typical of Socialist countries: they simply stop working," said Boskovic.

Yugoslavia's new leaders acknowledge that the economic and social climate has worsened since Tito's death. But they insist that widespread popular support for Tito's policies of independence and non-alignment abroad and workers' self-management at home have helped maintain the country's political stability.

"People may want to get rid of us (politicians)," joked Ribicic, "but they want to keep the system."