Brazil is engaged in an intense debate over what to do with its diminishing and highly vulnerable Indian population.

Government officials in charge of Indian affairs have been feuding among themselves, and Catholic and Protestant clergymen as well as leading Brazilian Indian experts and scholars have joined in the fight. The main dispute is whether Brazilian Indians should be forced to adapt to modern civilization or whether the government should defend Indians against the "progress" that is pushing them off their tribal land and is threatening to destroy their native culture.

There has been a temporary truce, with everyone involved promising mutual cooperation to do what is best for the Indians. But no one doubts that the feud could start again at any time and a general feeling remains that the Indians' future is far from secure.

Brazil, with a total population of 110 million, has 180,000 to 200,000 native Indians left. Of these, some 110,000 live in absolutely primitive tribal conditions in remote and largely uncharted regions such as the Amazon jungle and Mato Grosso.

This is in dramatic contrast to the situation in 1500, the year Portuguese explorers discovered this South American country, when, according to historians, the native Brazilian Indian population probably was as high as 5 million.

The Indian controversy reached its most extreme point a month or so ago, when Interior Minister Mauricio Rangel Reis, the man ultimately in charge of Indian affairs here, declared that Indians should be pushed into modern Brazilian society as quickly as possible.

The minister ordered the suspension of grade-school-level instruction in native Indian dialects in reservation schools, on the ground that it was "a waste of time and money" for anyone in Brazil to be taught in a language other than Portuguese. Then he said he would kick religious missionaries off all Indian reservations in the country, branding them "draamers" and calling their work with native tribes "backward and feudalistic."

Rangel Reis also accused missionaries of "siding with subversives," in a reference to priests and pastors who have defended Indians against big land developers who, while opening up the Brazilian interior with official government backing, have simply taken over traditional tribal areas.

The interior minister's position, which countered a long-standing Brazilian government policy of gradual assimilation of Indians, provoked equally radical responses.

The Rev. Antonio Iasi Jr., executive secretary of a joint organization of Catholic and Protestant missionaries in Brazil, called Rangel Reis "a Brazilian Idi Amin" and added that the government Indian agency, FUNAI, whose name comes from the Portugues words for "National Indian Foundation," might just as well stand for "National Indian Funeral Parlor."

Apoena Meirelles, one of Brazil's most respected Indian scouts, whom FUNAI has sent out to make contact with the most remote and primitive of tribes, said: "If anyone is guilty of subversion, it's the government, because of the social unreset that has resulted from government land-development policies."

A surprising participant in the debate was Vicente Cardinal Scherer, the archbishop of Porto Alegre, generally known for his conservative, pro-government stance.

But after Rangel Reis' statements on Indian policy, Cardinal Scherer declared: "The long and tortuous history of Indians in our country has been one of pain, tears and revolting injustice. God save us from the blind and destructive power that exists at the decision-making levels of this nation."

Following what apparently was sharp internal debate within the government itself - which officials tried to keep from the press - the interior minister suddenly toned down his position. Bilingual instruction in Indian schools will continue, he announced, and missionaries will be allowed to remain on reservations "as long as they operate under FUNAI guidelines."

According to insiders, Rangel Reis lost an internal power struggle with FUNAI boss Ismarth de Araujo Oliveira, technically the minister's subordinate, but possessed of added ciout because he used to be an army general.

For the record, Oliveira, a champion of gradual and carefully planned integration of Indians into modern Brazil, declared that there is "no disharmony" between him and his boss - "contrary to what some newspapers say."

The fact is that some influential FUNAI officials who reputedly were pro-Rangel Reis were fired, while others who were known to be the Oliveria camp, such as Meirelles, were assigned to positions of greater responsibility.

Finally, Rangel Reis personally sought out Cardinal Scherer for a long talk. "We straightened out a few misunderstandings," the Interior minister said after the meeting. "The government and the church want the same things for Indians, and therefore we must establish a bridge of dialogue." There are uncomfirmed reports that Rangel Reis was ordered to smooth things over with the cardinal.

Some of the formerly enraged clergymen responded to the call for dialogue by admitting that missionaries must update their methods of working with native Indians, principally by taking specialized courses in anthropology. Missionary spokesmen also hastened to reject the idea of simply converting Indians to Christianity without preserving native tribal culture.

But the apparent truce does not guarantee smooth sailing for those who work with Indians in Brazil. At about the same time Rangel Reis was making his retractions, FUNAI, under orders from Oliveira, disbanded a meeting of 140 native Indian chiefs and subchiefs in the Amazon jungle.

The chiefs represented 15,000 Indians from three tribes in the far-off northern federal territory of Roraima. Missionaries had arranged the meeting, but FUNAI said it could not be held bacause it "wasn't authorized."

Bishop Tomas Balduino, the president of the interfaith missionary group, called the ban a "brutal violation of Indians' rights" and said FUNAI was trying to "shut Indians up." The bishop also contended that FUNAI officials in Roraima had openly sided with private landowners who were encroaching on Indian land there - to the point of supplying them with barbed wire for building fences.

Mario Juruna, a chief of the Xavante tribe in far western Brazil, commented: "It seems as though the government wants to keep Indians ignorant. Can it be that the government regards intelligent, politically aware Indians as dangerous?"

According to Apoena Meirelles, who has spent most of his life among Brazilian Indians since his father was one of this country's most renowned Indian scout and pacifier, FUNAI's gradual assimilation policy could work - but only if Indians' land rights are guaranteed. Otherwise, Meirelles warns, "The Indians will wind up as boias-frias, a Brazilian term for poverty-stricken peasant farmworkers means "cold-lunch eaters."

A more disheartening and pessimistic appraisal of the Indian situation in Brazil came from Orlando Villas-Boas, who, after working in the backlands with Brazilian Indians for more than 30 years, is probably the world's most respected authority on native populations here. He said: "If every Indian in Brazil were to disappear tomorrow, nothing would change. Many people probably would be surprised to hear that there were any Indians in the first place. Others, who see Indians as a barrier to progress, would be happy. Only the humanists of the world would ask why.

"But, eventually, no one would care, especially if the Indians were replaced by cattle - lots of cattle."