The Case of the Hollow Tank has been solved but not without raising trans-Atlantic grumbles of fraud and favoritism between American and German military contractors and politicians.

It centers on a contracting squabble for the $4.9 billion prize of a NATO tank contract between the manufacturers of the German Leopard II and the American XM-1 tank.

At issue was whether the Germans unfairly removed armor from the Leopard II in competitions designed to test the maneuverability and fuel economy of the two armored vehicles. The tests were conducted last year at the Army's Aberdeen, Md, proving grounds.

The case came to light during hearings last March before a House Armed Services subcommitte headed by Rep. Samuel S. Stratton (D-N.Y.), who suggested that the Germans might have been trying to rig the competition by lightening their entry in mobility tests.

The Germans had accused the U.S. Army of displaying "a bias for its own product" in deciding eventually to reject the Leopard in favor of the XM-1. The Leopard II is manufactured by Krauss-Maffei, a German concern, while the American tank is being made by Chrysler.

Army Maj. Gen. Robert J. Baer told the Stratton subcommittee that the Germans had eliminated 3.6 tons of armored plating and other equipment from the models used for maneuverability testing but carried the full load of armor in the hull supplied to test survivability.

The additional tonnage, said Stratton, would have made the Leopard II too heavy for bridges in Europe to carry. It would weigh in at 63.2 tons.

The Germans denied the charges and said it was normal to remove the armor between the inner and outer walls for the maneuverability tests.

In an effort to smooth the ruffled feelings on both sides of the Atlantic, military officials of both governments issued a communique on May 19.

"The U.S. Army at no time felt that Germany engaged in deceptive practices," it said, " and it is regretted that this impression developed."