A clash between Chancellor Helmut Schmidt and the Catholic Church has managed to add a spark to the lackluster West German election campaign, now entering its 10-day final stretch.

The quarrel has focused on Bonn's growing debt -- a somewhat complicated subject but one with significance for West Germany's social and economic policy.

Its emergence as a central campaign theme is a victory of sorts for the opposition Christian Democratic and Christian Social Union parties, which have been attacking excessive government spending. For the first time in what has been an uphill run for challenger Franz Josef Strauss, Schmidt has appeared on the defensive.

The episode has also produced some rather odd twists, with Schmidt having taken to quoting papal encyclicals during campaign speeches and West German bishops preaching political slogans from the pulpit.

The church fired the first shot. In a strategically timed letter read in churches last Sunday, the West German bishops warned against the state's expanding roles in daily life and pointed critically to Bonn's increased level of indebtedness and the expansion of government bureaucracy. They also chided the Social Democrat-led government for liberalizing abortion and divorce laws so that "love is destroyed and peace endangered."

Such use of the pulpit for politicking rankled Schmidt, once a national elder of the Lutheran Church. "I don't see anything about state indebtedness in either the Old or New Testaments," he responded. "Nor was I aware that there was a theological institute specializing in financial affairs." There was also talk, though unsupported in Bonn, that the government might consider stopping its service of collecting taxes for the church.

In another church statement yesterday, the bishops reasserted their right to comment on political issues, calling it their duty to speak out "no matter whether it is political, useful or troublesome." To remain silent, they said, would be a retreat to the past.

As for the threat to stop the tax collection, the bishops said this practice has not been a favor but a business deal, for which the church pays the state more than $73 million a year.

The current row threatens to revive a traditional rift between the Catholic Church and the largely Protestant Social Democratic Party. The rift dates back to 1931 when a papal encyclical said that it was impossible to be both a good Catholic and a real socialist.

This attitude softened in the mid-1960s as a result both the Second Vatican Council ruling that Catholics were free to differ in their political opinions and the formation in West Germany of a Social Democrat-Christian Democrat coalition. A new tolerance took hold in the Catholics' regard for Social Democrats.

Now the tolerance appears to have eroded. This may be a reflection of the move by the Vatican itself into a new conservative, and at the same time politically active mood, since the assession of Pope John Paul II. In the Social Democrats' view, the decisive factor behind the surprising politicization of the church in West Germany is the drift of the Catholic voters away from the Christian Democratic Union since Strauss was chosen as rival to Schmidt.

Though the conflict has relivened the national campaign, few expect it to have a decisive effect on the outcome.All the same, the irritation the church letter caused in Schmidt is evident in his campaign speeches.

For example, he strongly defends his government's costly support of the coal industry as a smart investment in an energy-uncertain world. At another point, he lists the things Bonn finances through credit -- including new church hospitals.

When talking about family and work issues, the chancellor has begun to drop in a reference to the fact that he has discussed social policy with two popes over the years. To justify state involvement in the economy, he has been quoting from the "Mater et Magistra" encyclical of pope John XXIII.

West Germany's strong-economy, he said in speeches this week, is due not to church policy but to the policies of his party during its 11 years in power. t

Even so, the issue of Bonn's indebtedness is not likely to go away after the election Oct. 5. It is part of a larger debate in the country about the role of the state, public sector borrowing and inflation, and the election has simply served as a catalyst.

On the surface, the West German economy still looks quite healthy, with an inflation rate this year averaging 5.5 percent, unemployment under 4 percent and a growth rate over 2 percent. The attention being given here to a subject as academic as indebtedness might strike American voters, preoccupied with runaway inflation and growing unemployment, as excessive.

But the fear of excessive debt strikes a sensitive chord in West Germany, where the public debt amassed between two world wars led to financial collapse and currency devaluations that dissipated family savings overnight. One result has been a great emphasis placed on saving. Today, the average West Germany saves about 13 percent of his income, compared with the 4 percent saved by Americans.

Total borrowing by Bonn is small in comparison with debt levels in other developed countries. It accounts for only 28 percent of gross national product, compared with 52 percent in the United States and 61 percent in Britain.

But what the opposition has been complaining most loudly about is how fast Bonn's debt has been growing. The volume tripled in the 1970s to $232 billion, climbing almost as sharply in the last 4 1/2 years as in the previous 26 years since the republic was founded. Experts predict it will rise to $255 billion by the end of this year.

Much of the growth is attributed to spending programs initiated by Schmidt's government after the 1973-74 oil crisis to stimulate the slowing economy. Other credit moves were encouraged on West Germany by leading industrial countries at the Western economic summit in Bonn in 1978.

While the recent weakening of the economy -- marked by the appearance of deficits in current account and trade for the first time in 15 years and a slowdown in production -- has heightened sensitivity among West Germans to economic concerns. Schmidt and his Social Democrat partners can and do confidently point to the valued West Germany mark as a sign of overall economic stability.

As the chancellor said in campaign speech this week, "I haven't heard that Schmidt had decided to deposit his money in lira in Italy instead of German marks."