It is a tale as old as the West but as contemporary as the booming Sun Belt, with midnight flights by federal officials scrambling to secure signatures on contracts before Congress could stop them, Indians fighting for what they say is their right to survival and the future of two rapidly growing cities at stake.

The issue is water, a commodity as precious as oil in the arid Southwest. The dispute is over how Arizona will divide the riches it will one day receive from the massive Central Arizona Project which will channel water from the Colorado River to central and southern Arizona.

When Interior Secretary Cecil Andrus declared earlier this month that a group of Indians tribes were entitled to an increase share of the water from the project, state officials raced into federal court to stop him. That touched off a flurry of events that has produced a batch of signed contracts between the government and the Indian tribes, a court injunction ordering Andrus to stop and an angry split between the Carter administration and one of its last friends in the West.

"It's a particularly bitter pill for me," said Arizona Gov. Bruce Babbitt. "After 1978, I was virtually the only governor west of the Mississippi to support the Carter administration. I stuck up for the president. I struggled with the water problem. Now I walk away with the same bitter taste that every other western governor has."

"If he still feels it's a bitter pill, I'd say he helped create the prescription," Andrus said. "He was in on this entire process, including public and private sessions. His private agreement with us seemed to be much closer than his public reaction. It sounds like Bruce is looking forward to his reelection." p

The disput is perhaps the final ironic link of a circle for President Carter, who began his presidency by creating a political firestorm in the West over a "hit list" of water projects he wanted to eliminate and who lost every western state to Ronald Reagan in the November election.

"There's a lot of breast-beating that this is a Feds versus the West fight," said Dan Beard, an Interior official. "But this is a much more complicated issue than the Sagebrush Rebellion. We hold the key because we are building the project. They have to remember that."

"The secretary firmly believes that the Indians were put on the short end of the stick and he felt strongly that the federal government ought to correct it," Beard added. "We just simply couldn't resolve our differences [with the state], so Andrus said, "Let's proceed."

"If those Indian water allocations were not made, non-Indians would find a way to take the water away from the Indians, as they have most of the other Indian-owned resources the last 200 years," Andrus said.

But Arizona contends that Andrus' decisions, particularly his formula for sharing water in years of shortage, could force Phoenix and Tucson, in Babbitt's words, to "unnecessarily limit growth."

When it is completed later in the decade, the Central Arizona Project will deliver about 1.2 million acre feet of water annually to Arizona. The project was on Carter's hit list, but later was removed. Shortly thereafter, Andrus and state officials began discussions to get the project moving. "At the top of Andrus' list was enactment of a new groundwater law for the state," Babbitt said. This law was designed to move the state toward use of other sources of water to prevent depletion of the groundwater supply. "I got the parties together. We negotiated for 500 hours and wrote the most comprehensive groundwater policy in the country. We had to break a lot of heads, but we got it enacted."

Andrus also told Babbitt the state would have to resolve the Indian claims for water from the project. Four years ago, in the final month of the Ford administration, Interior Secretary Thomas Kleppe issued allocations giving Indians about 250,000 acre feet (an acre foot is enough water to cover an acre to a depth of one foot). Andrus and others declared that figure to be inadequate and began negotiations with the state to change it.

Andrus took particular issue with Kleppe's plan calling for the Indians to receive that amount until the year 2005, after which their share would be reduced.

"The negotiations went on and on and on, but we never managed to reach agreement," Babbitt said.

Last summer, Andrus issued preliminary allocations. In essence he decided to allow Indian tribes not included in Kleppe's original plan to receive water from the project. Most of this water would be used for agriculture. "The options paper from Interior was an exercise in fantasy, it was so unrealistic," Babbitt said.

The stickiest problem was what to do about water shortages in future years. Andrus said all parties should share equally in the shortage, but the state said cities should have first claim to the water. State officials also said that because the Indian allocations were for agricultural use, effluent produced from planned sewage treatment plants could be substituted for CAP water.

"If you're talking about water for human consumption to stay alive, then I come down for human consumption," Andrus said. "But if we're talking about watering golf courses and maintaining grand fountains in the square, then Indian agriculture comes first."

But Arizona officials argue that Andrus' allocations run contrary to the new groundwater policies he forced them to develop. "Our studies demonstrate that we need to reduce our agriculture uses of water and reduce them markedly," said Wes Steiner Arizona state water resources director. "We adopt the toughest groundwater management law in the country and the secretary jerks the rug out from under us. It would be difficult for us to meet the mandated goals of the new statute under the secretary's allocations."

State officials are particularly upset that water will be given to the Indians to develop new agricultural lands at a time when the state must cut agricultural production to meet growing needs of the cities.

"I hate to get into comments that will sound belittling to the Indians," said Jack Murphy, administrative assistant to Arizona Sen. Barry Goldwater, "but . . . the tribes have not made use of assets available to them. It's a historic argument between those who are productive and those who are not. The non-Indians have made use of water and developed good crops."

But Ned Anderson, president of the Inter-Tribal Council, a coalition of Indian tribes, disputed that view. "The basic issue is survival for the tribes," he said. "We cannot survive without the water from the CAP. Babbitt is trying to show people in Arizona he's doing something on their behalf, when what he's actually doing is extinguishing the existence of American Indian tribes who have been allocated water. We're talking about people. We should not have political ambitions interfere."

In human terms, state officials estimate that because of the Andrus allocations, the cities will be short about 192,000 acre feet of water, which is enough to satisfy the municipal and industrial water needs of 1 million people, Steiner said.

"That probably means you've got to put limits on your population," Steiner said.

Sometime in the fall of this year, Andrus concluded there was no way to reach a deal with the state. "It became obvious that some of the people at the state level were simply trying to stall," Andrus said.

On Dec. 1, he issued his final allocations and, before the day was out, the state went to court for a temporary restraining order to stop him. The judge refused, but almost immediately Arizona Sen. Dennis DeConcini introduced an amendment to pending legislation in Congress that would have prohibited Andrus from spending any money to get contracts with the Indians guaranteeing them the water. And at that point, Andrus decided to barge ahead again. He ordered Dan Beard onto a late night flight to Arizona, where Beard quickly managed to get 11 of the 12 pending contracts signed. Then, on Dec. 17, the judge in Phoenix issued an injunction ordering Andrus to cease.

Nonetheless, federal officials are pleased. "We locked in Andrus' allocations and we gave the tribes a contractual right that is now defendable in court," Beard said. "They can now go in and say they are a party in interest in this case."

Babbitt says he will now have to begin new negotiations with the Reagan administration, while the dispute over the signed contracts continues in court. "The Indians have legal claims to water," Babbitt said. "I support that. But what has happened in Andrus' office is that they're just so remote from the realities of water planning that they were incapable of making the effort to match supplies and demand."