Death has not diminished the legendary ability of Indonesia's late President Sukarno to attract huge crowds.

On the eighth anniversary of the disgraced leader's death, the Indonesian radio estimated a million people turned out today in the obscure East Java town of Blitar to witness the dedication of a new mausoleum over Sukarno's grave.

The ceremony took place against a background of mounting interest here in the controversial political legacy of the flamboyant man popularly known as "Bung [Brother] Karno." Windowsized portraits of Sukarno are sold on street corners alongside posters of rock stars. Many of his leftist writings, still banned by the current government are secretly circulated.

Sukarno's speeched, which usually lured massive audiences, parked the rebellion against Dutch colonial rule that led to independence in 1945, and he became the first president of the Republic of Indonesia, now the world's fifth most populous nation.

"The Indonesian nation is truly obliged to give the highest appreciation to Bung Karno as the proclaimer of our beloved Republic of Indonesia," President Suharto said in a speech at the mausoleum.

Political observers speculated that Suharto, once a bitter foe of Sukarno, is now cautiously embracing him in an attempt to exploit lingering devotion to the late president and garner support for his own policies.

Local newspapers reported crowds in trucks, buses, taxis and vans descended on Blitar, where Sukarno was born in 1901. Many camped on the roadside and vendors set up makeshift souvenir and food stands.

The $395,000 mausoleum is 51 feet high, with a copper roof of contemporary three-tier Javanese design. Underneath, Sukarno's plot is flanked by that of his mother and father, and a stone of black andesite bears the inscription, "Here lies Bung Karno, proclaimer of independence, first president of Indonesia."

The new structure contrasts sharply with the simple grave to which Sukarno's body was swiftly transferred one day after his death in 1971. He died in military detention pending a decision by president Suharto on whether to prosecute him for involvement in the upheaval of 1965.

That movement commonly believed to have been led by members of the once powerful PKI Communist Party, occurred when the Indonesian economy was on the brink of collapse partly as a result of Sukarno's lavish spending on national monuments and sports complexes and his growing resistance to foreign aid from Western countries.

At the time, he espoused a philosophy he termed Nasakom, which combined concepts of nationalism, religion and communism. Most scholars believe the PKI seized the opportunity to attempt to win control of the government, touching off a power struggle between Sukarno and Suharto, then an Army general who led the counter-attack against the Communist Party.

From 300,000 to 500,000 people are believed to have been massacred in reprisals following the unsuccessful Communist uprising. The left-leaning Sukarno became a symbolic victim of those reprisals and was stripped of his presidential powers in 1967. Suharto replaced him in Indonesia's most powerful political position.

Members of Sukarno's large family, which included at least six wives, contend their patriarch's death was hastened by the near total isolation imposed on him in 1968. The government refused permission for regular visits by family members. His fourth wife, Hartini, told a Singapore magazine shortly before his death that Sukarno's "health and spirit were irretrievably broken."

Student disenchantment with Suharto led to a resurgence of interest in Sukarno about two years ago. In a gesture of conciliation, the government lifted a ban on some of Sukarno's early writings and slowly began rehabilitating the tomb and Sukarno's name.

Most of Jakarta's newspapers gave wide coverage to today's dedication ceremony, recalling popular stories of "Bung Karno" and filling their front pages with photos of his familiar grin. The Army newspaper ran a fourcolumn, half-page photo of Sukarno and Suharto chatting and smiling before the uprising. At the bottom of the same page was cartoon depicting a scale in the hands of the people that showed Sukarno's services to the country "outweighing his faults."

The newspaper Merdeka, often at odds with Suharto's Golkar party, bluntly editorialized in its English-language edition that "Blitar was not the place where Bung Karno himself wanted to be buried. He wanted to rest in beautiful Parahyangan [in mountains near Bandung]. And on his tombstone he wanted the words "Here lies Bung Karno, the interpreter of the Indonesian people."

The editorial also said, "He will always be rembered as a great son of the land. And no distortion of history will be able to erase this image, however hard people try," an obvious reference to the government's early campaign to reduce Sukarno's stature.

Angered by the government's sudden about-face on Sukarno, and its decision to build an ostentatious mausoleum against his last wishes, family members boycotted today's dedication. Sukarno's outspoken son, Guntur, said the family "from the beginning did not take part in the mausoleum restoration." Instead, he said, the family is setting up a Bung Karno foundation to promote the late president's legacy.

In addition to the controversial tomb, President Suharto also announced the government would build a statue of Sukarno and the nation's first vice president, Mohammad Hatta. The linking of Hatta's name with Sukarno in Suharto's dedication speech was interpreted here as a means of tempering the praise of Sukarno. Hatta resigned as vice president in a dispute with some of Sukarno's policies.

In his 10-minute speech, Suharto refused to totally exonerate "Bung Karno," but said: "May God forgive all his Sukarno's [mistakes]. CAPTION: Picture, Sukarno pinned medal on Suharto when latter took over Indonesian Army. UPI; Map, no caption, By Richard Furno-The Washington Post