The death of an eight-year-old boy here has touched off the worst administrative scandal in recent German memory and may have kept a far larger calamity from engulfing this city of 1.7 million people.

The scandal involves the discovery that a World War II arsenal of death -- including tons of decaying ammunition, explosives, poison gases and other toxic chemicals -- was left lying around in the buildings and yard of a deserted chemical factory. City administrations that had been repeatedly warned that the plant was dangerous had done nothing about it.

The episode began Sept 6, when the boy, Oliver Ludwig, his brother and a friend slipped through the dilapidated wooden fence and into the rubble-strewn yard of the Hugo Stoltzenberg chemical plant in Eidelstedt, an outlying district of Hamburg.

Hours later, the youngster was blown to bits and his two companions severely wounded when material they had picked up in the plant yard and brought home to play with exploded.

A week later, the child's father linked the death to the plant. When police and Army experts went to investigate, they came upon what eventually weighted in at about 500 tons of chemicals and explosives.

By Sept. 16, the daily nightmare of what was being found took an even grimmer turn when eight grenades filed with "tabun" -- a deadly nerve gas tested by the Nazis on concentration camp inmates -- were found rotting in a toilet. Two of them were leaking. One pound of tabun, say the specialists, is enough to kill 200,000 persons. The next day, seven gallons were found.

Fear and anger swept through the neighborhoods. The episode revealed that various city offices for the past 20 years had received warnings that the factory was a dangerous place, but nothing was ever done.

City officials acknowledge that in 1959, construction workers on a road near the plant reported finding indications of poison gas containers. Authorities did not follow up.

In 1970, a leading leftist author, Guenter Wallraff, reported the presence and production of poison gases at the plant in an article. A legislator, Helga Schuchardt of the Free Democratic Party, asked for an investigation. But a supposed inspection by city offices did not lead to any action.

"One has to suspect that the gentlemen inspectors were treated to a champagne breakfast," she says not.

Six times in recent years, city authorities now acknowledge, police and firemen have filed written complaints about the place. There have been other complaints from residents, several coming after a fire and explosion at the plant in 1977. But apparently nothing ever got beyond the city files.

"You could even read the labels on things when you looked through the fence," one resident said this week. "It's amazing only one child was killed. Lots of them went there to play for many years."

City Councilman Peter Rabels, who prepared a preliminary report for parliament this week, said reports by various offices in the past uniformly described the plant as disorderly but that nobody persisted in demanding a full investigation and action.

Hamburg's beleaguered mayor since 1974, Hans Ulrich Klose, 42, said so many city offices have probably been touched with blame that it may be easier to name authorities who have had nothing to do with it.

Klose, just a few weeks ago one of the brightest young political stars in West Germany, describes the situation as "the most terrible, shaking scandal."

"This is a quiet neighborhood with lots of small gardens," says Anna Fletscher, a local resident. "Now, when we see a patch of yellow grass or fruit dying on the trees we think the worst. It's terrible to think that this has been going on here all this time and that people knew something was wrong but did nothing. A lot of us feel deceived."

The danger, confusion and reprecussions, however, may be far from over.

The Army removal squads that carefully picked their way through the debris finished getting everything out of the buildings and yard early this week. But nobody knows what is underground.

There have been reports, which authorities are taking seriously, that highly explosive nitroglycerine and other deadly nerve gases called "sarin" and "soman" are buried either near here or in other places where the firm once had plants.

Last week the Army found 140 pounds of cyanide and far larger quantities of poisonous bromide at the home, just north of Hamburg, of Martin Leuschner, 66, the plant's most recent owner whom city officials decribe as "a strange man."

The factory was set up in 1923 and produced various kinds of munitions, chemical weapons and equipment before and during World War II.

Wallraff said an explosion there in 1928 that killed 10 people led to British and French inquiries about whether poison gases were being produced.

After the war, the firm produced such things as gas masks, air filters and smoke pots. Leuschner, who managed the plant for many years and then bought it 10 years ago from the original owners, closed it down two years ago. Since then he has made occasional visits to the grounds.

The disclosures have also nipped at West Germany's Defense Ministry in Bonn.

The ministry sharply denied a press report that it had ordered poison gas from the firm five years ago. But in the course of the denial, it acknowledged that it had some links to the firm between 1957 and 1967, when it took delivery of about 30 pounds of mustard gas to use in developing antidotes. It also bought some blank ammunition and gas masks.

In 1954, Bonn renounced production of chemical, biological or radiological weapons, though it is permitted to produce small amounts of some substances for testing antidotes. In 1970, however, former Defense Minister Helmut Schmidt, who is now chancellor, ordered that all poisonous gases for tests be bought abroad to remove any suspicion.

Today things are even quieter than usual in Eidelstedt, a community of about 30,000 people.

Whenever the Army squads are poking around the yard, the roughly 300 people who live around the plant and the 1,500 or so who work in neighboring plants, are evacuated.Police have all roads blocked about a quarter mile from the factory grounds.

The quiet, the police cars and the little red flags with black skulls that dot the area are all signs that something still is not right in Eidelstedt.