Ten years ago, the shrewd men at Mitsui, Japan's giant industrial group, took a well-calculated gamble when they decided to spend $250 million on the construction of a petrochemical plant in Iran.

It was the first major investment by a Japanese company in the oil-rich Middle East and central to Japan's bid to secure a steady, stable supply of petroleum-based raw materials to feed its voracious manufacturing industries.

Mitsui lost its bet. Today the still-unfinished project, Japan's largest overseas investment, has swallowed up $1.4 billion of the company's money and stands out as the great white elephant among the country's mostly successful foreign ventures.

Now Mitsui, which holds a 50 percent stake in the ill-fated complex at Bandar Khomeini in southern Iran, has delivered an ultimatum to its Iranian partners.

In Tokyo early this month, company officials told Mostafa Taheri, president of Iran's National Petrochemical Co., that Mitsui would withdraw from the project unless Iran agreed by mid-December to pay all further costs to complete it.

Work on the sprawling complex has been virtually stalled since the Islamic revolution in January 1979, when it was thought to have been 85 percent complete. The outbreak of war between Iran and Iraq in September 1980 forced the few remaining Japanese technicians at the plant to flee. Since then, repeated bombings by Iraq have inflicted a damage of several hundred million dollars on the facility.

Taheri came to Tokyo to convince Mitsui that the plant, originally scheduled to go into operation last year, could still be made to pay if the Japanese would continue their financial support, something they have flatly rejected so far.

Mounting odds against the project's viability prompted Mitsui to stop investment payments last April. Now the company insists that it will only provide basic technical assistance on plant construction and operation and only if Tehran agrees to bear all future costs.

"All [Taheri] did was show us reams of figures which basically meant nothing," said Mitsui managing director Toshio Iijima. "There is no sense of reality in what the Iranians are telling us."

Mitsui now shoulders a major financial burden as a result of the troubled venture. Company officials said the interest payments on loans outstanding for the plant's construction now are $444,000 a day.

Obligated to start paying the principal on these loans next February, Mitsui has pressed its Japanese bankers for a delay. The banks have agreed, industry sources here said, provided the company moves quickly to cut further losses in Iran.

Mitsui has other headaches. Among its five group companies involved in the deal are four large chemical producers who are fighting against mushrooming deficits because of a sharp downturn in demand and sluggish world prices.

Mitsui's patience has been strained by what is widely viewed here as the incompetence of Iran's Islamic leaders in business affairs.

Under the joint venture agreement, Iran is obligated to ensure a long-term supply of naphtha and other basic ingredients essential to petrochemical production.

Now that the war with Iraq has punched a hole in Iran's ability to produce these items domestically, however, Tehran has started talking about substituting costly imports.

"A supply of cheap raw materials was the key to this project," Iijima explained. "But the Iranians have changed their ideas about how to provide it at least three times in the last year. Against that kind of uncertainty it's simply impossible for [Mitsui] to go on."

Mitsui has estimated that annual sales of petrochemicals from the completed complex could reach $1 billion, but Iranian officials insist they would be at least twice that amount.

Taheri's attempts to bargain Mitsui into a compromise reflected the importance Tehran places on the completion of the plant.

The 28-year-old engineer told the Japanese that Iran viewed it as a "monument to the Islamic revolution," and he warned that ties between the two countries could be damaged should Mitsui back out.

Taheri's arguments appeared to have carried little weight with top Japanese officials, including Prime Minister Zenko Suzuki, who strongly endorsed Mitsui's hard-line stand.

Before the Islamic revolution, Japan imported 13 percent of its oil supplies from Iran. Now that figure is 5 percent, and government officials suggested that Tokyo is less concerned about the possibility of an oil cutoff that might result from a breach in relations with Tehran.

The government, however, has invested more than $90 million in the project, and it is believed officials have privately urged Mitsui to push ahead.

Should Mitsui withdraw, it would stand to collect a maximum of $600 million in official benefits under a government-sponsored export insurance program.

Financial officials here have expressed concern that payment of such a sum to Mitsui would unacceptably strain Tokyo's already deficit-ridden state finances.

In setting the mid-December deadline for an Iranian reply, industry sources said Mitsui hopes to force Tehran into tactical concessions on financing that might pave the way for additional Japanese investment.

So far, however, Iran has displayed few signs of flexibility on the issue.

"If we get a firm answer," Iijima said, "the matter may be subject to further negotiations. But right now the two sides are very far apart." Taheri's attempts to bargain Mitsui into a compromise reflected the importance Tehran places on the completion of the plant.

The 28-year-old engineer told the Japanese that Iran viewed it as a "monument to the Islamic revolution," and he warned that ties between the two countries could be damaged should Mitsui back out.

Taheri's arguments appeared to have carried little weight with top Japanese officials, including Prime Minister Zenko Suzuki, who strongly endorsed Mitsui's hard-line stand.

Before the Islamic revolution, Japan imported 13 percent of its oil supplies from Iran. Now that figure is 5 percent, and government officials suggested that Tokyo is less concerned about the possibility of an oil cutoff that might result from a breach in relations with Tehran.

The government, however, has invested more than $90 million in the project, and it is believed officials have privately urged Mitsui to push ahead.

Should Mitsui withdraw, it would stand to collect a maximum of $600 million in official benefits under a government-sponsored export insurance program.

Financial officials here have expressed concern that payment of such a sum to Mitsui would unacceptably strain Tokyo's already deficit-ridden state finances.

In setting the mid-December deadline for an Iranian reply, industry sources said Mitsui hopes to force Tehran into tactical concessions on financing that might pave the way for additional Japanese investment.

So far, however, Iran has displayed few signs of flexibility on the issue.

"If we get a firm answer," Iijima said, "the matter may be subject to further negotiations. But right now the two sides are very far apart."