Italy's dominant Christian Democratic Party suffered its biggest electoral setback in more than three decades today, barely running ahead of the Communists in nearly complete returns.

Abstentions and an apparent protest vote benefited the neofascists and the smaller parties in the outgoing center-left coalition. The Communists, the largest Marxist party in the West, ran even with their showing in the last national elections in 1979 in the voting for the Chamber of Deputies, the lower house of parliament.

Despite the heavy Christian Democratic losses, the election result will almost certainly lead to another coalition government of the type that has been ruling Italy for most of the past two decades. But political commentators said there could be protracted negotiations on forming a new administration, Italy's 44th since World War II, with the minor parties demanding a larger share of Cabinet seats and a bigger say in policy making.

Communist calls for a "democratic" coalition, excluding the Christian Democrats, already have been rejected by the Socialists, whose support is essential for any future government. Socialist Party leader Bettino Craxi, who provoked the election by withdrawing support for Christian Democratic Prime Minister Amintore Fanfani, said tonight that he saw no alternative to the center-left formula.

The negotiations about the shape of the next government will be based on the parties' showings in the Chamber of Deputies. With 96 percent of the Chamber vote counted, the Christian Democrats had 33 percent, just ahead of the Communists' 30 percent. In 1979, the Christian Democrats had polled 38.3 percent and the Communists 30.4 percent.

The Socialists, who won 9.8 percent four years ago, were third with 11.5 percent, followed by the neofascist Italian Social Movement with 6.6 percent, the Republicans with 5.1 percent, the Social Democrats with 4, the Liberals with 2.9 and the Radicals with 2.2. Votes for tiny fringe parties and blank or invalid ballots, considered a gesture of, made up the balance.

In the Senate, with all votes counted, the Christian Democrats won 32.4 percent, the Communists 30.8 percent and the Socialists 11.4.

Many political commentators expressed concern that, by underlining the fragmented nature of Italian politics, the election could make Italy even more "ungovernable." The coalition that fell April 29 was divided deeply over economic strategy, with the Christian Democrats complaining that their austerity policies had been "watered down" by the Socialists.

Inflation is running at 16 percent, higher than in any other major industrialized nation, and unemployment is hovering around 10 percent. Economists predict that this year's public sector deficit could reach $60 billion--more than $13.3 billion over budget.

The Christian Democrats' leader, Ciriaco de Mita, told journalists that, as a result of the election, "The problems of government will become more complex, more difficult." He said that the vote had represented a "protest" and a "condemnation" rather than a positive choice for a new political program.

The election result represents a personal defeat for De Mita, an outspoken 55-year-old lawyer from Naples who had been campaigning to modernize the image of the Christian Democratic Party, which has dominated Italian politics since 1945. Opinion polls taken during the campaign had suggested that there would be no major upsets and that the Christian Democrats' vote would hold steady at around 38 percent.

The gap between Christian Democratic and Communist representation in the Chamber of Deputies and Senate is now smaller than at any time since World War II. The Communists came to within 2 percentage points of the Christian Democrats' share of the vote in regional elections in 1975, but never have approached this in national elections until today.

The Communists' campaign platform includes strong opposition to the planned deployment of U.S. cruise missiles in Sicily starting early next year. They blamed the Christian Democrats for a string of corruption scandals and mismanagement of the economy.

Communist Party leader Enrico Berlinguer described the vote as "a clear condemnation by the voters of the methods of government and management" of the center-left coalition and as a blow to de Mita's "attempts to move to the right."

Part of the reason for the upset could lie in the votes of the 3.7 million young people who were taking part in their first election. Representing more than 8 percent of the electorate, they appear to have broken with the political habits built up over generations by either abstaining or voting for the fringe parties.

Among the new deputies elected to Parliament is Toni Negri, a political philosopher who is on trial for "subversion" after being accused of being the ideological influence behind the left-wing terrorist Red Brigades. The fringe Radical Party chose him as a candidate as a protest against his imprisonment without trial for four years and he now qualifies for release from jail on grounds of parliamentary immunity.

The Red Brigades claimed responsibility today for last night's assassination of a leading public prosecutor in the northern city of Turin, Bruno Caccia, who was gunned down by masked men in a passing car.