A bloody battle between police and Asian immigrant demonstrators here Monday night has focused attention in the midst of a national election campaign on the volatile problem of racial conflict in Britain.

The cause of the conflict-in which one man was killed, more than 40 people were injured and 340 were arrested-was a campaign meeting held by the militantly racist, neo-Nazi National Front Party. The meeting was held in the west London suburb of Southall, where about 40,000 Asians live in one of Britain's largest nonwhite immigrant communities.

Several thousand police officers were trying to protect the 59 National Front members and supporters from an estimated 2,000 Asian, black and white demonstrators led by the Anti-Nazi League. Violence flared when the demonstrators began throwing bottles and bricks and the police fought back with truncheons.

It was the worst riot in Britain since Anti-Nazi League demonstrators tried to stop a National Front March in August 1977, in the north London industrial suburb of Lewisham, where many black West Indian immigrants live, and the second such violent clash in a week.

The National Front, which wants all non-white immigrants to be driven out of Britain, has put up candidates for more than 300 of Britain's 635 House of Commons seats in the May 3 national election. It won more than 100,000 votes in local elections in the London area in 1977.

The Anti-Nazi League is a collection of leftist activists from the 1960s, white opponents of racism and militant young blacks and Asians who want the National Front banned as a political party and who have tried to use physical force to stop its meeting and marches.

Prime Minister James Callaghan said at his daily campaign news conference today that the National Front is "pernicious, provocative and too reminiscent of the Nazis to be comfortable for this country."

Margaret Thatcher, leader of the Conserative Party that is challenging Callaghan's Labor Party in the national election, said, "We totally condemn the racial policies of the National Front," she added, however, that "the way to beat them is by the ballot box, not by bricks and bombs."

She called the Southall violence "a disgrace to demoncracy" that "must be dealt with by the whole might and power of the law."

Strengthening law and order and further restricting immigration from black and Asian Commonwealth nations are among the principle pledges the Conseratives have made in their party platform for this election. On several occasions during the campaign, Thatcher has reiterated her belief that tighter entry restrictions are needed to protect immigrants already settled here from unemployment and from hostility on the part of white Britons who feel "swamped" by concentrations of immigrants in some communities.

Public opinion polis show that a majority of the British voters agree with Thatcher's views on immigration. Her rating in public opinion polls improved abruptly early last year when she first stated those views in a national television interview.

There are about 2 million black and Asian immigrants in Britain, about 3 percent of the total population. They began coming here from the West Indies, India, Pakistan and other Commonwealth countries in the 1950s to work on buses, subways and construction, and in textile mills, store and restaurants.

Many white Britons, especially those in and around the large urban areas where the majority of immigrants are settled, have never felt at home with them.

Far fewer black and Asian immigrants-about 40,000 a year-are entering Britain today, however, because immigration from the Commonwealth has been severely restricted by legal and bureaucratic changes made since the late 1960s by both Conserative and Labor governments. The new Conserative proposals would mostly restrict or slow the entry of wives, children and parents of Asian men already permanently settled here.

Overall, emigration exceeds immigration, according to government statistics, and the rate of enery has been failing.

Although many immigrants have been here for an entire generation, they have not been a strong political force. They have not been very active politically and there are no black or Asian members of Parliament.

Nevertheless, the Labor Party has undoubtedly depended on the votes of Asians and blacks for some of the parliamentary seats it holds in urban areas. A number of immigrants also have been elected to local councils in areas such as Southall.

Since the Conservative's large initial-lead fell to five to seven percentage points over Labor in this week's opinion polls, both the Conservatives and Labor are wooing the immigrant vote in urban constituencies more actively than ever before.

Conservatives, despite their immigration policy, have targeted constituencies around the country where they believe immigrant votes are necessary to keep a Conservative in Parliament or oust a Labor member. Conservative candidates have been meeting with local black and Asian leaders and community groups. For the first time, they are distributing campaign literature in a variety of languages spoken and read by immigrant voters.

Many months of this personal contact and the attractions of Conservative tax and small-business policies to immigrant shopkeepers and skilled workers have won a small but significant number of new Asian and black voters for some Conservative candidates, according to a party official. He acknowledged, however, that those efforts have been hampered by a prevailing belief "that the Tories don't have a sympathetic approach to immigrants."