Everything's up-to-date in Keynes' City. But, unlike the American musical comedy tune about Kansas City, the still unanswered question is whether this most ambitious of Britain's so-called new towns has "gone about as fer as it can go."

In a country that seems to be fighting a losing battle against unemployment and is struggling to attract foreign investment, this city with the unlikely name and most un-British design is doing rather well.

Since it was founded in 1967, about 43,000 new jobs have been created here. The population has grown from 40,000 to 120,000, the fastest growth rate of any urban area.

Since 1971, when development moved into high gear, about 600 firms have moved here, 120 of them from abroad, including 50 American companies, 32 from Scandinavia and 10 from Japan.

With the exception of London, Milton Keynes, which looks more like it belongs outside the beltway or in a Los Angeles suburb, has a higher proportion of overseas investment than any other British city. It is among the highest in attracting private investment, and about 1 percent of all private home construction in the country is going on within its 35-square-mile area.

But Milton Keynes is not yet a British success story. Rather, it remains an experiment that has lost much of its earlier political support and now must survive by its own salesmanship.

It is an odd place, sterile to the eye of the visitor and repugnant to many Britons as a place to live. Influenced by the Los Angeles road system, it is spread out, with long, wide boulevards that hamper frequent bus service and can produce a sense of isolation for those without cars.

Yet interviews suggest that most who have come here seem to like it.

In many ways, this place may be a frontier not just of imported suburbia but of the kind of attitude that other parts of Britain might have to adopt as they seek to modernize their economies and fight for their share of Britain's jobs and the world's business.

"Most people in the United Kingdom, if told they were moving here, would be absolutely horrified if they hadn't been here before," said Robert Hill, commercial director of the Milton Keynes Development Corporation that is the city's planning authority. "What it represents to nonmobile Brits is all that is modern and vulgar. They all marvel at 'Dallas' on TV, but their image of what is the ideal life still is the thatched-roof and garden."

"But once they get here, they see it as a place of opportunity," he said, a view that also appeared to be confirmed by random interviews in the city. Furthermore, said Hill, "it is the flexible Britons, the ones who will move from their home towns, that come." They, in turn, attract companies that seek a flexible work force "capable of being retrained and not as blinkered in its approach."

The history of Britain's "new towns" goes back to just after World War II when the decision was made to create about 20 such places with populations in the 15,000 to 60,000 range. A few were really new. Most were enlargements of existing villages.

The movement gained momentum in the 1950s. But it was the 1967 government decision to set aside a huge rural tract 50 miles north of London and start from scratch to build Milton Keynes that marked the most ambitious attempt at any new town. The city was forecast to have 250,000 people by the year 2000.

At the beginning, it was hoped that the new towns would help relieve pressure on the big, high-density cities. But by the late 1970s, the central government and the two main political parties began to have second thoughts. Attention turned toward putting money into refurbishing the inner cities, a trend that was reinforced by the urban riots of 1981.

"We are an orphan now," said Hill. "The forces of urban development have turned full circle. We are almost operating without a government policy or philosophy. It certainly isn't fashionable for a [member of parliament] to support new towns" these days, he said, "and there aren't many votes in them."

But, Hill said, "clearly we disagree with all that. We are a bit of an embarrassment now because we are a success. We are a separate economic growth point." Hill said he sees this as an important new role in a changing Britain.

In large part, the city's success is due to its location, astride major road arteries and with some 30 million people within a 2 1/2-hour drive. As a result, many firms have put distributorships here.

The city has built a vast array of housing for workers and managers, ranging from inexpensive row houses and apartments to more luxurious homes typical of up-scale U.S. suburbs. Milton Keynes, which is named after a tiny village and not after the famous economist John Maynard Keynes, also has pioneered what is called shared ownership. Under this system, people who cannot afford to buy can purchase a portion of their homes and pay rent on the rest until they can afford to increase their owner's share.

Unemployment is about 12.5 percent, about a percentage point below the national level. Hill said the town should do better but that the figure is affected by the fact that when a family moves here, a spouse or teen-age child almost always starts out unemployed.

Still, new companies are coming in at the rate of three a week, said Stuart Evans of the development corporation. Monsanto, the U.S. chemical multinational, has just announced plans to move its European headquarters here, and Alps Electronics of Tokyo is setting up a home-video assembly plant.

The Japanese are setting up a school for children of employes, and Milton Keynes may turn into a British Duesseldorf, the West German city where much of Japan's business community on the European continent congregates.

A huge, immaculately kept indoor shopping mall, the largest in Britain, draws 250,000 shoppers and visitors a week, with about half coming from out of town. British Rail has opened its most modern new terminal here to handle some 28,000 commuters to and from London. The British headquarters of the New York-based Stone & Webster engineering firm envelops the new station.

Urban planners from 40 to 50 countries have come here during the past few years, ranging from groups from Columbia, Md., and San Jose, Calif., to Hong Kong's city manager, the French trade minister and, three weeks ago, the governor of Tokyo.

"In the beginning," said Hill, "we wanted to be loved. But it's the people from overseas that give us confidence."

Behind the boosterism of Hill and the development corporation, however, lie some serious questions about the future.

Technically, Milton Keynes is bankrupt. Under archaic government rules, the new towns are financed by borrowing from the Treasury through fixed 60-year loans at the then-going rates. Most of the older towns long since have paid off their loans. But Milton Keynes was financed at the peak of high interest rates in the mid-1970s and is hobbled by massive loans at 18 to 20 percent.

This is money the government owes itself, and it will probably be written off in part, Hill and others said, while the town contributes to the federal treasury through property sales and taxes.

Perhaps more importantly, the development corporation may be dissolved by 1989, although Hill thinks it will continue into the 1990s. The question then will be whether the city can maintain its aggressive, new business-seeking habits.

Victor Hausner, an urban development specialist at the Policy Studies Institute, said a crucial question is whether Britain as a whole will "mobilize the kind of reserve of professional development talent that has been built up in the new towns' corporations," especially big ones like Milton Keynes, "and apply them to the older, existing cities, which are the new targets, with the same level of success."

The British government essentially is trying to turn the Docklands area of London and the Merseyside area around Liverpool into inner-city new towns.

Ultimately, Hill believes, the test for Milton Keynes will be how it regenerates itself and adjusts to unforeseen changes, including those in the economy. "At the moment, parts of the city feel like a frontier, still raw. The trees are immature. But you can't create antiquity overnight, and we are going to be more of a community," he said.

"It takes a couple of years to adjust," said Bryan Sainsbury, who moved here seven years ago from London. "And we wouldn't move back to London," added his wife, Sylvia. "There's less violence and more countryside," said Theresa Stephenson, another ex-Londoner.

"If you want peace and quiet, this is the place," said a taxi driver. "But if you want more, go elsewhere. A lot of marriages here break up because of what's not here," he said, speaking of the limited social and night life.

Just beyond the rail station, a cluster of black-and-white spotted concrete cows stand in a meadow. For many years they have been a source of ridicule for Milton Keynes, viewed as a symbol of the artificiality of the new town. Yet like most other things here, the reality is more complex. The cows were a gift from an American sculptor, Liz Leyh, who was the city's artist-in-residence, and some of the children of Milton Keynes seem to like to climb on them.