In the canyon country, the world is silent. For hundreds of miles, red rocks rise in arches and spires, castles and fortresses, each formation as majestic as its name: Island in the Sky, Moses and Zeus, Cleopatra's Chair. It is a natural sculpture garden, carved by rivers, wind, ice and time.

Here, one mile from Canyonlands National Park, the federal government is considering a plan to construct 400 acres of buildings, build a 37-mile railroad, tunnel 3,000 feet into the earth and bury several thousand tons of radioactive waste in what would be the nation's first high-level nuclear waste repository.

Department of Energy officials have stressed that they are still studying six other sites in five states to find the safest final resting place for the 8,000 tons of radioactive waste now stored in pools beside power plants around the country. The decision will not be made until 1987, the officials said, but so far their studies show Canyonlands to be one of the safest.

The mere suggestion of placing something so lethal beside something so pure has set off explosive arguments, stretching from the roadside diners of Moab to the halls of Congress.

But while the waste repository is the immediate topic, it is not the only topic, nor, perhaps, even the central one in this emotional debate over the future of this region's vast open spaces.

Many of the residents of the Canyonlands area of Utah see in this proposal the seeds of prosperity in a time of recession. Just as many see in it the seeds of destruction for a place and a way of life.

Gov. Scott M. Matheson, fresh from a two-year battle to keep the MX missile out of Utah, recently forced a temporary halt to the studies here by denying to the DOE permits needed to cross state land.

Matheson, chairman of the National Governors Association, in a recent interview accused the Reagan administration of practicing "pick-and-choose federalism."

Five state and national environmental groups are seeking to block the site studies through legal maneuvers, using the issue to dramatize their objections to the administration's push for more development on public lands. And the National Park Service has voiced concern.

"Canyonlands is a place where people can hear nothing but silence," park superintendent Pete Parry said. "They can get away from the sights and sounds of man. Obviously, if you have 1,800 construction workers 4,000 feet from the park, that makes it a bit more difficult."

Beleaguered Energy Department officials have stressed that their chief concern is safety.

"We're dealing with the real world, and we have to go where the best geology is," program engineer Leslie Casey said. But non-DOE geologists recently have questioned the stability of the salt beds beneath Canyonlands, which lies in the drainage basin of the Colorado River, a prime western water source.

These issues take on a different dimension here in Moab, a one-time uranium boom town recently gone bust. Moab is 60 miles from Canyonlands, but is dependent on it for tourism.

The people in this town of 5,300 have feuded for generations about how to treat the natural grandeur that surrounds them: whether to exploit its mineral riches or protect its unspoiled beauty.

The fight has pitted farmers against miners, aesthetes against developers and almost everyone against the federal government, which owns more than three-fourths of the land in the two-county area.

Now Moab is torn again, this time in a classic debate of jobs versus the environment, protection versus profit, a microcosm of the struggle being waged in Washington between the Reagan administration and its conservationist critics and in virtually every western state.

The latest furor began when the federal government disclosed last year that the Canyonlands site, in a region known as the Paradox Basin, was a leading contender for a nuclear waste burial ground because of the thick salt beds beneath it. Salt, basalt and tuff (compacted volcanic ash) are among the safest natural structures for isolating radioactive waste, according to federal officials.

The officials promised that if the Canyonlands site were selected most of the facilities would be invisible from inside the park, tucked behind a 6,100-foot-high rock formation known as Six Shooter Peak, named for its resemblance to a gun barrel. The railroad would be visible from several scenic overlooks, though, according to the draft plans.

Local officials and business leaders, desperate for an economic pick-me-up, immediately announced support for the project if studies showed it would be safe.

"Our town is dying. Our industry's dying," said Grand County Commissioner Ray Tibbets, the straight-talking, silver-haired owner of a Moab bargain clothing store on Main Street. "If it can create jobs, I'm for it. You can't protect something at the expense of everything else."

Tibbets and several of his allies have predicted that one day the nuclear waste site could surpass the park as a tourist attraction.

"People from the East who've been raised among concrete think there's some small piece of the West that hasn't been bulldozed over and they better stop us or we'll bulldoze it over," said San Juan County Commissioner Cal Black, a uranium mine owner who sits on the Interior Department's Public Lands Advisory Board.

These views are echoed by the miners, millers and truckers who make their living off uranium and who gather at the Hitchin' Post, a tavern just off the main drag. There a trucker named Mike (Yackety Yak) Jaramillo recently was lamenting, with two friends, the plunging price of uranium when the nuclear waste project inevitably came up.

"We dig it out here, why not bury it here?" he asked.

But there is another Moab, a layer of younger people who flocked here after the uranium boom to live amid beauty and solitude, fleeing cities and success ladders. They include businessmen, teachers, boatmen who guide tourists down the Colorado River and dozens of others who work odd jobs to get by until they can escape to the mountains.

To many of them, bringing nuclear waste to the canyon country in the name of economic recovery is "equivalent to pimping for your mother," according to Dennis Sweeney, a native who recently returned from California to open a photography shop.

Bill Hedden, a neurobiologist who left Harvard and the East to settle in a remote valley here, has turned much of his life over to fighting "the dump." He joined a state nuclear waste task force, and has filled his hand-built home with DOE documents, geological studies of salt structures and aquifers and copies of federal environmental laws, hoping to halt the project on legal or scientific grounds.

The technical jargon began to sound absurd, Hedden said on a recent evening as he stood outside, watching the sun set on the red rocks surrounding his valley like a circle of castles.

"I've come to the point of saying wait a minute. I don't want it in my town because it's going to play hell with my sense of well-being and it's going to ruin one of the most special places on earth," said Hedden, now a cabinetmaker and father of two. "Here I can appreciate what the country must have been like before it got destroyed. Nobody needs any technical arguments to fight them to the death."

Like so many past battles in Moab, this one has become bitter. The business leaders have written off the opponents as nomads who wear bandannas and get their mail at Post Office boxes. The other side has accused the businessmen of money-grubbing shortsightedness. The businessmen do not deny that many of them would profit directly from continued DOE work here.

But Dwight Johnston, whose oil fields service firm lost DOE contracts when the testing was suspended, said recently, "My conflict of interest has nothing to do with this. The backpackers are a special interest group too."

The two sides have organized into "Utahans Against the Dump" and a coalition of businessmen who say they simply want the studies to continue. The weekly newspaper, The Times-Independent, runs an average of two front-page stories an issue on the controversy.

"It's been good for the news business, but I'm about to say a plague on both your houses," said editor and publisher Samuel J. Taylor. "I'm sick of the polarization. Moab has been sensationalized."

The issue escalated from a local controversy to one of federalism last month when Matheson stepped in. Relations between Matheson and federal officials had deteriorated for months as the governor pressed for a full environmental impact statement before the DOE moved to the next stage of tests: the drilling of nine holes deep into the salt beneath the canyon.

DOE refused, and the Interior Department's Bureau of Land Management, which owns the park periphery, gave the go-ahead for the tests, saying the tests would cause "no significant impact" on the environment.

That prompted an angry Matheson to invoke state powers to block the tests by denying permits to the federal vehicles. Environmentalists followed with an administrative appeal that will delay further testing until later this month.

Recalling the MX battle, Matheson said recently he feared that the search was zeroing in on Utah for political reasons. Testing at two other possible sites had been halted, in Mississippi because of a state-imposed moratorium, and in Louisiana because of a promise from President Carter that the state could veto a nuclear waste project if it accepted strategic petroleum reserves. Testing at the remaining salt sites in Texas was continuing.

Matheson said he would not necessarily oppose burying nuclear waste in Utah if it proves to be the safest spot. But he said the DOE has not supplied his staff with enough data to convince him of that.

A department report showed the Canyonlands salt to be the thickest and deepest of any site being studied, but a state geologist recently reported evidence of gas bubbles beneath the surface of the canyon, posing a threat of natural gas explosions.

"I am concerned about our land. I am concerned about the Colorado River," Matheson said in an interview. "Nobody has proved to me that they won't be damaged. I'd like to know that, and I think the public would like to know that. And I am not willing to let the Energy Department come in and play Big Brother to the state of Utah."

Federal officials have said they need to proceed with the tests to answer the questions raised by Matheson and others. Politics is not a part of the process, they said.

DOE spokesman Phil Garon acknowledged that, "There probably have been some areas of our communication with Utah that need some improvement, but we feel it is straightening out."

Since Matheson halted the studies, his aides said they have received volumes of DOE documents. At the same time, federal officials are negotiating with the governor's staff in hopes of moving forward with the tests, so far without a breakthrough.

Meanwhile, Congress is wrestling with legislation intended to help resolve how and where the nation can dispose of radioactive waste. The government estimates that there will be more than nine times the current amount of commercial waste by the end of this century.

President Reagan, in his policy statement last year on nuclear energy, called on Energy Secretary James B. Edwards to "proceed swiftly" in solving the problem.

The current timetable calls for officials to select one of the five salt sites by next year. Then, for further exploration, the department will sink a 2,800-foot shaft at that and two other sites, a basalt formation in Washington and a compacted volcanic ash bed at the Nevada nuclear test site. The results of those studies will determine the location of the first repository, which would go into operation around the turn of the century.

For the moment, the people of Moab wait and continue to talk obsessively, but never in one voice.

"That nuclear dump ain't gonna get me any quicker than the Russians will," said trucker Dick Baum, as he drank coffee on a recent morning at a roadside diner called the Westerner, a haunt of miners and truckers.

Several miles and a world away, Bill Hedden looked out at the silent canyon country.

"I'll leave here if they build the dump, and I don't think I could ever go to another unspoiled place to live again," he said. "I couldn't stand to see it eaten up."