After two years of experimenting with a "loyal opposition" within a multiparty system in Egypt, President Anwar Sadat and his opponents seem thoroughly disenchanted with each other, raising fundamental questions about the prospects for any kind of Western-style democracy taking hold here.

No one disputes that there is far more freedom of speech, rule of law and personal security today than under the police-state dictatorship of the late Gamal Abdel Nasser. But the contention of Sadat's opponents is that, while touting abroad a return to "full democracy," he has effectively established a lopsided one-party system chosen his heir apparent and made it impossible for any real opposition party to arise within the confines of the parliament.

"We have the shape only of a democratic system," says Ibrahim Shukri, the aging leader of the main centrist opposition Socialist Labor Party who was personally asked by Sadat in 1978 to found and lead the loyal opposition.

"We are very near to a one-party system," Shukri remarked sadly in an interview at his parliament offices.

Khalid Mohieddin, the main leftist opposition leader, agrees with these assessments. "There is a big difference between what Sadat says and what is happening," he said in a separate interview. "The government says it is democratic, but is isn't. There is no confrontation, just a lot of obstacles. dIt is the Egyptian way."

The Socialist Party has been reduced over the last 18 months from 29 to 16 deputies in the 390-seat parliament but Mohieddin's National Progressive Unionist Party failed to gain a seat in the last general elections in June 1979.

But his party still operates legally and groups a broad coalition of leftist elements opposed to Sadat's "open-door policy" of economic liberalization and to his peace treaty with Israel as unforgivable "deviations" from Nasser's socialist, pan-Arab revolultion.

Known as the "red major" because of his Marxist leanings, Mohieddin is a historic figure in contemporary Egyptian politics, having been one of the original nine "free officers" who plotted the 1952 revolution that overthrew King Farouk, ended the monarchy and brought Nasser to power. Before then, Egypt had a lively multiparty system, which older Egyptians still remember vividly and many would like to see restored.

Today, Mohieddin, 60, readily admits that his party, claiming only 25,000 active members and 100,000 followers, and the left in general are not as significant a force in Eqyptian politics as the rightist underground groups or the outlawed Moslem Brotherhood.

"The general trend in Egypt is to the right," he said. "The trend to the left is big but not as big as the trend to the right."

Foreign analysts dispute Mohieddin's assertion of any surge in leftist sentiment, however. "The left doesn't have any influence with the Egyptian people at all today," said one Western diplomat. "They don't represent any real serious problem to the government."

It is difficult to say when the disenchantment with Sadat's style of semi-democratic rule set it. But some Egyptian observers cite last Feb. 18, the day the Israeli flag was unfurled for the first time in any Arab capital, as a turning point in Sadat's relations with his loyal opposition.

That event stirred even Shukri's mild-mannered Socialist Party to demonstrate and toughen its attacks on Sadat's policies in its weekly newspaper Al Shaab.

Regarded by foreign residents as "the liveliest paper in town," Al Shaab, with a circulation of 90,000 and a lot more readers, took to criticizing the president by name with an acerbic pen. Sadat, who is said to be sensitive to public criticism of his leadership, took the attacks badly.

"The family in Egypt does not criticize the father, and Sadat thinks of himself as the father," one Western scholar said. "Anyway, it's very difficult in this country to criticize someone's program without the whole thing becoming personalized."

Sadat accused his once-loyal opposition of bad faith, poor manners and yellow journalism, warning that "this does not serve the nation."

More seriously, according to critics, his government has made it increasingly difficult for the legal opposition to voice any public criticism. Mohieddin's party is not allowed to have a newspaper at all, Shukri's is struggling to get enough newsprint from the state-owned Al Ahram newspaper to keep Al Shaab going, and several attempts to both to get permits for demonstrations have been refused.

Shukri blames subtle government threats to Socialist Labor Party members, such as loss of jobs, and the withholding of state aid to its deputies' home constituencies for the defection during the last 18 months of 13 of them to Sadat's ruling National Democratic Party, which now holds 369 of the 390 seats in parliament.

"People say, 'What is the use of being in this party? You can do nothing for your people'," said Shukri, explaining the sharp decline in his party's strength. "That is very harmful."

Shukri, in common with many foreign analysts, is increasingly convinced that Sadat's true intentions all along were probably to establish a dominant one-party system to perpetuate his policies and even his choice of a successor, who right now appears to be Vice President Hosni Mubarak.

Meanwhile, Shukri's Socialist Party is weighing whether to continue playing the part of Egypt's token and hopeless ineffectual opposition.

"We are sad because in the beginning we had many hopes for a democratic life," Shukri said. "We wanted to see in his [Sadat's] time this change from a one-party to a multiparty system. I don't know why he is doing this, but if he gives more freedom it is the best way."