Prime Minister Lee Kuan Yew, upset by the recent election of a lone opposition member to Singapore's Parliament, is tightening the political reins in a state that is already one of the most closely controlled in Southeast Asia.

Apparently as part of the stricter new atmosphere, Lee is moving to place a career civil servant in charge of the city-state's main English-language newspaper, the privately owned Straits Times. Journalists at the paper have accepted the move as unavoidable, but negotiations reportedly have been going on to define the new official's title and powers.

The move follows the arrest last month of 10 Singaporean Moslems accused of plotting to overthrow the government. Five were tried and sentenced two weeks ago to jail terms ranging from two to four years. The others were later released and the government said they had "expressed repentance."

While the case was given prominence by the local press and ostensibly taken seriously by the government, details of the alleged plot made the accused terrorists seem about as fearsome as the gang that couldn't shoot straight.

According to the new opposition member of Parliament, Workers' Party leader J.B. Jeyaratnam, the government has been trying to discredit him by pointing out that five of those arrested were members of his party.

The government denies any such effort, insisting that the 10 were detained for "subversive activities" and not for their political affiliation.

The government said the 10 Moslems, arrested Jan. 9 and 10, were members of a clandestine group, the Singapore People's Liberation Organization. The Home Affairs Ministry said the group intended to overthrow the government by force with foreign help and planned to "create communal unrest" through arson, bombings and distribution of leaflets.

The leader of the group, Zainulabiddin bin Mohammed Shah, 49, an Indian Moslem, was arrested with an associate while trying to distribute pamphlets at the National Stadium where 24,000 people were celebrating the prophet Mohammed's birthday, the government said. Similar pamphlets were later found in the house of Zainulabiddin, a self-employed journalist and publisher.

The government charged that the pamphlets contained "many highly seditious statements calculated to inflict communal resentment" by accusing the government of oppressing Singapore's ethnic Malays and other Moslems.

Apparently most alarming to authorities was the conclusion in the pamphlet that "it is the duty of every Moslem to protest the morality of Islam by whatever means. True Islam does not fear death. Imbibe a political spirit among our people to crush the suppressive policies of the PAP fascists." The reference was to Lee Kuan Yew's ruling People's Action Party.

"Had these pamphlets been circulated in the stadium," the Home Affairs Ministry declared, "the contents would have whipped up the feelings of the crowd, which could have led to a civil disorder."

Although the government claimed the group planned terrorist violence, there have been no reports that it seized weapons or explosives.

Rather, the details of the plot that emerged portrayed the group as almost farcically incompetent. In a statement, Zainulabiddin said he unsuccessfully sought financing from Libya and Vietnam. He said he visited the Vietnamese Embassy in Jakarta in December to request a base and broadcasting station in Vietnam but realized the answer was no when an embassy official handed him some publications on Vietnamese trade and industry instead.

Obliged to rely on his group's own means, Zainulabiddin said, he asked the other members to contribute toward the cost of producing pamphlets but managed to raise only $24 and had to pay the rest himself.

Although members of the group used code names Zainulabiddin apparently did not bother much to conceal his beliefs. When they raided his apartment, police found a picture of Iran's Ayatollah Ruhollah Khomeini on the front door.

Earlier protest activities included stamping bank notes with slogans such as "PAP sucks blood" and "PAP is the enemy of Islam."

According to the government, Zainulabiddin ran for Parliament unsuccessfully as a Workers' Party candidate in the 1972, 1976 and 1980 elections, which were swept by the People's Action Party.

Jeyaratnam, the first opposition politician to sit in Parliament since 1968, conceded in an interview that Zainulabiddin had been "actively involved" in the Workers' Party. But Jeyaratnam argued that the plot case was overblown in an effort to "smear my party" by implying it is full of extremists.

"The ordinary man has the impression this is an attempt to crack down on the Workers' Party," said the London-educated lawyer.

Jeyaratnam, 55, who says he is a Social Democrat, won an Oct. 31 by-election in a dockyard district on a vague platform of greater social welfare and more sensitive government. Since then, he said, the government has tried to limit his effectiveness as a member of Parliament by "petty niggling things" such as denying him office space and cutting him out of community functions.

In addition, Lee has publicly expressed his distaste for opposition parties, calling them a source of instability and confusion. In a speech to his party's legislators in November, the prime minister, the only one the former British colony has ever had, exhorted younger leaders to meet the "dangers lurking ahead." Otherwise, he said, "modern Singapore may not survive its first generation founders."

If the warning sounded unusually dire for the most prosperous state in Asia after Japan, some Western diplomats attributed it to a desire to shake up the proteges whom Lee, 58, wants to inherit the government.

"The prime minister has talked of a lack of tough political experience" among the second-generation leadership, one diplomat said. Thus the sharp reaction to Jeyaratnam's election and the alleged plot create an atmosphere of "political crisis" that Lee hopes might spur the younger leaders, he said.

At the same time, the diplomat said, the capacity for troublemaking of even a small, disorganized group should not be overlooked. He cited Singapore's history of rioting and antagonism between the dominant ethnic Chinese, who comprise 76 percent of the population, and the Malays and Indians, who make up most of the rest.

The same characteristic in Lee of never taking chances on holding power may also explain his move to install S.R. Nathan, as executive chairman of the Straits Times, diplomats said.

Seen as a capable administrator who knows Lee's mind, Nathan ran the security intelligence department of the Defense Ministry before moving to the Foreign Ministry several years ago, diplomats said. He currently holds the title of first permanent secretary there.

According to diplomats and journalists here, Lee has never been entirely happy with the Straits Times, although it obediently toes the People's Action Party line like Singapore's other news media.

The government became particularly incensed when the paper printed a story about an imminent steep increase in bus fares shortly before the Oct. 31 by-election. A sensitive issue, bus fare increases caused rioting in the early 1960s and news of an increase may have contributed to the People's Action Party candidate's defeat, diplomats said.

The government strongly denied the story and the paper was obliged to print a retraction, saying it had been misinformed. But bus fares have been raised in the last two months.

An opportunity to assert more control over the paper arose when the chairman of the Straits Times board announced he was resigning--some sources say because Lee asked him to.

According to Singaporean journalists, Lee called in members of the board and asked them to appoint Nathan. Because of Lee's tight grip on the political and economic life of the booming city-state and his own popularity, refusal was out of the question, the sources said.

Meanwhile, the government has already asserted control over a new English-language newspaper, the Singapore Monitor, scheduled to start publication in April.

Lee's press secretary, James Fu, has been named to the Monitor's board and the government indirectly has a share of the paper through one of the Monitor's owners, the official Development Bank of Singapore, the sources said. They attributed the government's interest in the two papers to the growth of English as a leading language in Singapore.