People once called Chicago "the city that works," but you wouldn't know that here, where a campaign is under way to prevent "Chicago-style government" from coming to this rapidly growing desert city.

Full-page ads in the local papers depict three fat politicians sitting in a smoke-filled room, apparently dividing up the city's spoils. The text reads, "You hear a lot of bad things about big-city politics. Unfortunately, most of them are true. Especially in big cities with ward systems."

"In Phoenix," the Phoenix Gazette added in an editorial, "the ward system would produce ugly brawls of untethered ward heelers."

The target of these ads is Proposition 200, a ballot initiative that will be voted on Wednesday by the citizens of Phoenix. Proposition 200 would replace the current system of electing the six-member City Council at-large, or citywide, with a council of eight members elected by geographic districts.

The fight in Phoenix is typical of battles throughout the South and Southwest to eliminate the at-large system of representation, which has been used to frustrate minorities and other constituencies.

Civil rights activists see the elimination of at-large elections as perhaps the last and most difficult battle in their long struggle to gain adequate representation under the Voting Rights Act, especially at the local level. "At-large systems really diminish the chance for minorities to win," said Willie Velasquez of the Southwest Voter Education Registration Project.

Many at-large systems have been challenged in court on the grounds that they discriminate on the basis of race. The Supreme Court has ruled that such systems are not unconstitutional unless there is clear intention to discriminate.

But in Phoenix, where Mexican Americans make up 15 percent of the population and have not had a representative on the City Council since 1977, race is only part of the equation. More fundamentally, Proposition 200 represents a struggle for power by some local residents who believe city hall ignores their interests.

Proposition 200 represents the most serious threat to the Phoenix business establishment's dominance of city government in many years. It has sparked a divisive campaign between that establishment and what one local executive called "a group of impatient activists."

The proposition is opposed by Mayor Margaret Hance, all but one member of the council, the Phoenix Metropolitan Chamber of Commerce and the Phoenix 40, the vehicle of the existing business and corporate establishment. They say that government in Phoenix, which has won awards as an All-American city, is clean and efficient and that the so-called ward system would introduce logrolling, geographic infighting, partisan politics and labor-union dominance.

But Terry Goddard, 35, a local attorney who led the petition drive that put Proposition 200 on the ballot, argues that the existing system provides inadequate representation in a city with a population of 800,000 and an area of more than 300 square miles.

"We're beyond the size that we can depend on small-town city fathers," he said. "This city is so big and so diverse that it is impossible for one person to comprehend the problems and adequately represent them."

Phoenix residents defeated similar propositions in 1967 and 1975. Last spring, after another petition drive had been mounted, Mayor Hance appointed a 17-member Charter Review Committee to recommend changes in the city government. But in July, when that committee appeared to be dragging its feet, Goddard mounted his effort, gathering 17,000 signatures in two weeks.

That was particularly galling to the elected leaders and the local establishment, who say a pure ward system is too extreme for Phoenix and that Goddard was "premature" in moving ahead of the blue-ribbon task force.

"I don't enjoy being an advocate of the forces of darkness or the stand-pat forces, but I just don't think Phoenix needs to take this step," said Bill Schulz, a leader of Committee for a United Phoenix, which has raised about $140,000 -- including contributions of $5,000 or more from major banks -- to defeat Proposition 200. Schulz said he favors a system of at-large and district representation.

The arguments against Proposition 200 are rather interesting, with Schulz, for example, claiming that it might be better for the nation if 100 of the 435 members of the House of Representatives were elected at-large, rather than by districts.

Goddard is upset with the timing of the election, a Wednesday in December, and with the choice of "200" as the proposition designation. That is the same number used for a bottle bill initiative defeated earlier this month, and there are still grocery bags around town, distributed by supermarkets, that say, "Vote No on Proposition 200."