Teng Hsiao-ping Communist China's dominant figure today, heartily endorses free speech in wall posters now covering Peking even while disagreeing with some of their comments and considers it a return to the brief "let a hundered flowers bloom" campaign two decades ago.

Vice Premier Teng confirmed to us in an exclusive interview that the Communist Central Committee had been meeting here but denied a reported purge of radical members. While also denying a de-Maoization campaign, he admitted late Chairman Mao Tse-tung made a few mistakes. And Teng brushed off-reports of a power struggle by him against his nominal superior, party chairman and Premier Hua Kuo-feng; he cold have had the premiership last year if he wanted, Teng said.

On U.S. relations, Teng declared Taiwan could maintain its own non-communist economic and social system under unification with the mainland - the furthest he has gone to ease a U.S. switch in diplomatic relations from Taiwan to Peking. This normalization of relations, said Teng, would do more for U.S. security than any number of SALT treaties with Moscow.

These were highlights of an interview lasting nearly two hours at a cavernous sitting room in the Great Hall of the People. The 73-year-old Teng, less than 5-foot-4, has been a phoenix rising from three purgings as a "capitalist roader." He answered questions with enthusiasm and wit, asking not to be quoted directly but putting nothing off the record.

Apart from his slightly more liberal construction of a special arrangement for Taiwan, Teng's foreign policy comments stressed that familiar admonition for Washington to beware of the polar bear. It was his public discussion of internal Chinese affairs, unimaginable for his predecessors, that broke new ground.

In his first press interview since Peking's current wall poster campaign exploded Nov. 22, he volunteered his approval without being asked. There is nothing to fear from this, he said: If the masses have comments, let them speak out. Answering a question, he said this was a return to Mao's let-a-hundred-flowers-bloom campaign of 1957, which ended with repression of dissent.

Teng noted to us Mao's restrictions (described by an interpreter as separating noxious weeds from fragrant flowers). But significantly, Teng did not call for suppression of those posters which he said were not so good. He disagreed with a huge poster near Mao's mausoleum calling Mao 70 percent right, 30 percent wrong. While contending 70 percent is too low, Teng did not prohibit anti-Mao sentiments on posters.

He did specifically deny any de-Maoization campaign, praising the late chairman and quoting widely from his "Thoughts." He stressed he never would mimic Khrushchev's role in downgrading Stalin. Nevertheless, Teng conceded Mao had made some mistakes - an unthinkable statement in China a year ago and a little shocking even today. In short, if Mao is more than 70 percent, he is less than 100 percent.

While comments by the masses on wall posters are basically correct, Teng they may not know the whole story and therefore are not necessarily accurate. This, he implied was the case of posters calling for purging several Central Committee members, including former Peking Mayor Wu Te.

Teng confirmed the Central Committee was in session and had criticized some members, but was mainly concerned with the national modernization program. He said nobody was being purged. Wu Teng had made mistakes, said Teng, but now agreed to policy. Wall posters have denounced Wu Te's role in suppressing the April 5, 1976, demonstrations in Peking's Tien An Men Square, which led to the third and final purging of Teng. So, apparently incorrectly, the posters were attributed to Teng's influence.

Reacting with amusement, Teng called absolutely groundless reports of a struggle between him and Chairman Hua. This, on the long interview's final question, was the first time the chairman's name was mentioned. Teng disclosed he could have had the premiership when the radical Gang of Four was toppled in China's latest political convulsion last year but preferred a younger man, the 57-year-old Hua. Anyway, Teng added, even Marx and Engels had their differences.

Teng acted like a man who needs nobody's approval to express opinions. But he also emphasized he wanted no more of the political turnmoil that he plagued China's 29-year-old communist regime. His stress was stability, not further purges or power grabs.

This tiny, feisty man, who became a communist with Chou En-lai in France half a century ago, is at his advanced age clearly in a hurry. His drive for a rational economic and political system and quest for an American alliance against Moscow represent the pulse of China today. These efforts, plus Teng's comments to us about them, will be explored in future columns from here.