Police today found the body of rich Basque industrialist abducted 33 days ago by Basque guerrillas who demanded $15 million for his release.

The killing is likely to make ETA - which fought dictator Francisco Franco and opposed Spain's first free elections in 41 years - unpopular. Since King Juan Carlos' in situation of democratic procedures, many Basques have stopped supporting the violent methods of ETA, hoping they can win self-rule in the new Parliament.

The killing of Javier de Ybarraf 63, came despite appeals by Basque self-rule political parties, which won a majority of the seats for the region in last week's elections, that the underground free the former mayor of Bilbao as a gesture of reconciliation.

An ETA note Monday said that Ybarra had been "executed" Saturday after the 3 p.m. deadline for paying the ransom. ETA also gave instructions on how to locate the body of the rightist leader, who fought for Franco in the 1936-39 Civil War.

Police did not find the body until today, however, after ETA issued a new note saying that searches had not followed instructions. Ybarra's body was found along an isolated mountain trail near Bilboa shot in the head.

The government tonight condemned the killing, saying it showed that ETA is against "the values and feelings of the Basque people." There was no indication that the government would resume repressive measures in the Basque region.

Premier Adolfo Suarez apparently hopes that the death will lead the Basque people to isolate ETA, which pledged May 24 to resume violence because the government did not grant a general amnesty to political prisoners. The government freed most such Basques before the election under an arrangement forcing them into exile.

Involved were 23 Basques, mostly ETA members, jailed for political violence. The government had expected Ybarra after the election, which brought hope that the Basques finally its gesture to win the goodwill of the Basques and restrain ETA.

A fragmented Marxist-Leninist underground group, ETA rejects democracy and self-rule for its home province. It wants a "socialist" Basque nation independent from Spain.

News of the killing came after elected Basque representatives met over the weekend in Guernica, the northern region's spiritual and political shrine, and formed a parliamentary bloc to push for self-rule and amnesty. It was the first time in 41 years that advocates of autonomy for the four Basque provinces met in the city, which was destroyed in 1939 by Nazi bombers flying for Franco.

Last month the Basque region was the scene of a harsh police crackdown against demonstrators for amnesty. Ybarra was kidnaped from his Bilboa villa May 20, after five Basques were killed in clashes with police.

The Ybarra family tried to contact ETA to discuss the ransom and manner of payment. It appeared that the Ybarras had expected ETA to free would solve their differences with Madrid by political means.