Heavy water, atomic fission and Mexico's nuclear future are alien concepts in this quiet village where Indian peasants spend most of their days working in the fields, making pots from local volcanic clays or fishing in the rich, placid waters of Lake Patzcuaro.

But this town in the state of Michoacan about 150 miles west of Mexico City is being considered as the site for a nuclear research reactor that could mark a new start for Mexico's struggling atomic energy program and, according to some, destroy this lake and its culture in the process.

The 100,000 people who live in a score of communities scattered around the shores of Patzcuaro find their way of life, their environment, the dramatically beautiful lake itself suddenly the focus of intense political passions. They are in the middle of the biggest nuclear controversy this country has ever seen.

This opinions are being sought, they are being educated, indoctrinated, organized to fight for or against what for most is a dim concept: "The apparatus," as they call it, or "this thing" to be built here.

The facility itself would be rather small by today's standards: two reactors, one of less than a megawatt and one of 40 megawatts. Its backers want construction to start immediately and they say that the small unit could be in operation within months, while the larger reactor would start up inside three years.

Other sites might be chosen. Patzcuaro, however, is relatively close to Mexico city and has an abundance of water, so it is technically the best, say the facility's advocates.

Emotionally and politically it may be the worst. This is because so many peasants are involved, and as a group they represent such a potent symbolic and political force in Mexican life; because this is one of the most scenic places in the nation; because of Mexico's fears, despite abundant oil, about its energy future; because of intense, sometimes defensive national pride.

In a reversal of the atomic debate elsewhere, the forces in favor of the reactor here are aligned with the political left. They are led by the militant Union of Nuclear Industry Workers (SUTIN).

"They have made it a nationalistic thing, which makes it very difficult to oppose," complained one antinuclear activist. "To be against it is made out to be antiunion. They say we're reactionairies."

When pro-reactor forces plan a demonstration it is billed as a march to support Mexico's energy independence, to protect Mexico's petroleum and other mineral wealth, which has been reversed since the nationalization of the oil fields 45 years ago as a precious national inheritance."

The recent discoveries of enormous petroleum reserves, potentially more than 250 billion barrels, would seem to assure an abundance of energy for several decades to come. But the Ministry of Patrimoney and Industrial Development has concluded that alternatives must be sought to the current dependence on oil and gas, which according to official statistics account for 90 percent of Mexico's present domestic energy supply.

With petroleum making up two-thirds of Mexico's exports and almost half of its foreign-exchange earnings, it is simply too valuable to use at home if something else can be found to take its place.

According to the recently published National Energy Program, Mexico's demand for electricity will triple in the next decade. Although coal, hydroelectricity and such relatively undeveloped technologies as solar, wind and geothermal power are being studied, nuclear power is officially considered the most attractive new source of domestic energy.

By 1990, Mexico hopes to have two commercial nuclear reactors in operation generating 2,500 megawatts of electricity, or about 1.5 percent of total domestic consumption. One, at Laguna Verde on the gulf coast, has been more than a decade in the building and should be open within the next two years. The energy plan calls for enough nuclear plants by the end of the century to generate 20,000 megawatts, although the exact number and location of the reactors has not bee decided.

The facility on Patzcuaro is not meant for commercial generation. It would be run by the National Institute for Nuclear Investigation, which already has a one-megawatt reactor just outside Mexico City. But it could play a vital role in Mexico's plans.

Present commercial reactors, including the one at Laguna Verde, use enriched atomic fuel. Mexico must depend either on Europe or, as is now the case, on the United States to handle the sophisticated and expensive enrichment process.

Advocates of Patzcuaro's reactor say this works against Mexico's stated goal of energy independence. If Mexico's apparently abundant uranium could be used without being enriched, then there would be no need to depend on anyone else.

The Patzcuaro reactor is supposed to develop such a technology. The whole idea is to learn by doing, but most likely it would start with help from Canada, which has 11 such natural uranium-heavy water facilities operating in Ontario and Quebec.

Other developing nations -- Argentina, India, Pakistan and South Korea -- have bought the Canadian system and have it in operation.

These reactors produce plutonium, a key element in atomic bombs. But Mexico is a militant opponent of nuclear arms -- it initiated the creation of the Latin American nuclear weapon-free zone -- so the question of a Mexican bomb does not loom very large in the debate.

Mexico's antinuclear forces, like environmentalists in many other Third World countries, have long been overwhelmed by the rush toward indistrialization. The questions they raise about the danger of nuclear waste disposal and the possibility of nuclear accidents have found little reconsnace in a nation bent on breaking out of underdevelopment.

In a sense, the environmentalists didn't have to do anything to slow the country's nuclear progress. The history of Mexico's attempts to get an atomic program going in the last 15 years has been one of repeated false starts, cost overruns and governmental indecision.The Laguna Verde project is years behind schedule, millions of dollars over budget and will not be in operation until 1983.

But two years ago the government began to reorganize its nuclear bureaucracy and now appears to have fostered a commitment to nuclear energy that "locks in coming administrations, which in itself is a remarkable achievement considering Mexican politics," one diplomat noted.

At the same time, however, the threat seen to Lake Patzcuaro and the culture that surrounds it suddenly has given the antinuclear movement its first potent rallying point.

If the reactor is built, its opponents claim, the lake will die. Water heated to drive the generating turbines will reenter the lake three or four degrees hotter than it left, eventually raising the temperature of the entire body of water and destroying its ecology. They say the microorganisms that are the basis of the lake's food chain will be killed.

Antonio Ponce, an executive committee member of the Union of Nuclear Industry Workers, says the microorganisms reproduce more quickly than they would be destroyed and the increase in the lake's temperature would be well within current seasonal variations.

Questions also are raised about the safety of nuclear reactor built in a volcanic region. The nearby Paricutin Volcano erupted in the middle of a cornfield only 38 years ago. The reactor proponents say its site area is seismically sound.

Emotion is at least as important as technology in this debate.

The proponents of the reactor "don't understand the fear," said Fernanda Navarro, a philosophy professor at the university in Morelia and one of the cofounders of the Committee for the Ecologic Defense of Michoacan. "Of course, they totally discard any chance of an accident. They say we're alarmists. They say we're just following a world fad."

Navarro says the flourishing tourist industry on which much of the area's economy depends will evaporate no matter how safe and secure the reactor could approve.

"Many people who don't have to come here will go someplace else when there's a reactor," said Navarro.

She questions the rationale of taking any nuclear risks at all. "Is it really necessary for a country like Mexico, with its climate, to pursue this nuclear goal? Why should we follow the model of super-developed countries?"

Even if Mexico's plans for nuclear expansion go ahead without problems, the entire string of reactors will not generate more than 5 percent of the country's electricity by the end of the century, Navarro said, and by then safer, nonnuclear technologies would be available for Mexico's needs.

Fear and loyalty, rather than physics and biology, are the tools most used to influence the peasants of this area.

Much of the furor over the reactor here has been generated within the university of nearby Morelia, the state capital. Students have rallied to one side or another and they have moved into the countryside to gather support among the peasants.

In Santa Fe, the townspeople were originally organized to fight against real estate developers for their communal lands, a struggle that is still going on but which the peasants seem likely to win. The same students and union members who helped them in that battle now want them to back the construction of the reactor, even though it would mean the loss of some of those same lands and would change the character of the village.

It is difficult to say if the people here really understand what has befallen them. Along the cobblestone streets of this village and behind the violet wooden colonade surrounding the dusty square, the walls are covered with militant graffiti. "Deaths to Imperialism." Death to the government of the rich." "End repression in the countryside."

But in the little grocery at the corner of the square a woman said, "We do not write those things.The student put those up."

Lake Patzcuaro's people -- whose dugout canoes and elegant butterfly-shaped fishing nets are featured in countless tourist brochures -- are mostly Tarascan Indians who speak, among themselves, the clicking, melodic language of their fiercely independent ancestors.

The lake is everything to them. According to legend they are descendants of nomads who migrated into Mexico along with the Aztecs. They went bathing in the lake and emerged to find that thieves or pranksters had stolen all their belongings so they simply stayed by the shore. Later they would remain one of the few Indian groups in the area that the Aztecs were never able to conquer.

Under Spanish rule they withdrew into themselves and salvaged what they could of their culture. But some now fear that the voracious appetite for energy and technology in fast-growing modern Mexico will finally finish off their way of life. Facts that are contradictory and often indecipherable even for the sophisticated give way among the Indians to a mass of disquieting fears.

"We're trying to get ourselves together to avoid this thing," said Ascension Jaramil, 44, who lives with his nine children on the island of Pacanda. "We live on the lake. We eat from it. We're only fishermen. We are wondering what we can do if they build it. We would have to go somewhere else, abandon the village. That is something we never wanted to do."