It is the kind of project ripe for controversy: a huge hydroelectric power and navigation system on the Danube River that involves joint construction by neighboring countries, major alteration of the environment, uprooting of villages and enormous investments of money.

When the Gabcikovo-Nagymaros system was planned by Hungary and Czechoslovakia in the early 1950s, Stalinist repression saw to it that there was no trace of public discussion. Thirty years later, however, the much delayed initiation of construction on Hungary's side of the Danube has touched off a protest movement that signals a changing political atmosphere in this Soviet Bloc nation.

For the first time in years, thousands of Hungarians are openly opposing their government by signing petitions and attending meetings to call for a halt in the river project, which involves the construction of two large hydroelectric dams and a 12-mile canal rerouting the Danube on the Hungarian-Czechoslovak border.

Three protest groups have sprung up to organize the petition drives and publish illegal pamphlets charging that the project is a spectacular waste of money that will cause serious environmental problems. About 10,000 persons have signed the petitions, one of which calls for a national referendum on the issue.

Authorities have shown no sign of yielding to the critics, or recognizing their existence. Because of this, or despite of it, the movement still seems to be growing. The result, its activists say, is a demonstration of civic independence that in itself is as important as its nominal cause.

"The Danube movement is becoming a protest for democratization," said Judit Vasarhelyi, a leader of the Danube Circle, the most prominent of the independent groups. "It's being done by people who a few years ago wouldn't have thought of taking such a stance. And it's showing that civic courage is increasing."

For years, Hungary has been regarded as one of the most liberal of the Soviet Bloc states because of its experiments in decentralizing control over its economy and allowing a measure of private enterprise. Political change has come more slowly, however, and popular challenges to Communist authorities have been almost nonexistent since the bloody suppression by Soviet troops of the 1956 uprising.

The Danube movement is one of several developments in the past year that have led Hungary's small group of intellectual dissidents to believe that society finally has begun to overcome the trauma of 1956 and is willing to challenge the government on political issues.

"With the environment issue, people realized that it is possible to act together in a movement," said Janos Kis, a prominent dissident philosopher. Some of the shows of independence have been facilitated by the authorities. Earlier this year, voters were allowed a choice of candidates in legislative elections, with the result that several well-known Communist officials were rejected.

More recently, muncipal councils staged referendums on a previously mandatory, nationally administered tax for local development. Several Budapest districts responded by rejecting the tax and accompanying development plan drawn up by Communist leaders.

Although discouraged by the authorities, the Danube Circle has attracted workers and rural residents as well as Budapest intellectuals. "These are people who have nothing to do with the 'official' opposition," Vasarhelyi said. "They have probably never heard about these professional academic intellectual dissidents. So the fact that they're participating is very significant."

Government authorities have not allowed the Danube Circle and two other groups, the Blues and Friends of the Danube, to register as legal political movements. The official press has ignored their statements and leaders occasionally have been harassed. Yet the group's growth can be at least partly attributed to the evident misgivings within the government over the river project.

While the hard-line Communist leadership of Czechoslovakia has relentlessly pressed ahead with its share of construction and allowed no hint of criticism, the Hungarians twice have backed away from the enterprise and commissioned major studies of costs and possible environmental problems.

Conceived in the early 1950s, when huge public works projects were fundamental to Stalinist-style planning, the Gabcikovo-Nagymaros plan is in many ways incongruous with the pragmatic, cost-oriented spirit of Hungary's current economists. The project is expected to cost the country at least $800 million over the next 10 years, in return for electric power equal to that of only one of the country's nuclear generators.

The diversion of the Danube to a canal in Czecholsovak territory is said to threaten a huge area of northern Hungary with the loss of forests, irrigation for agriculture, and drinking water. Meanwhile, Hungarian experts say another fundamental aim of the project -- to allow heavy ships to pass down the Danube on a course between Eastern and Western Europe -- no longer makes economic sense.

Hungary last suspended investment on the project in 1981, citing economic hardship, and during the four-year hiatus that followed asked the national academy of science for a study on the project.

After an extensive investigation, the academy concluded that the plan should not be carried through, in part because of doubts over the environmental effects and in part because the investment would not be cost-effective.

Nevertheless, the government suppressed the academy report and weeks later agreed with Czechoslovakia to renew work. Hungarian experts could only conclude that bureaucratic momentum combined with Czechoslovak insistence and the imperatives of "socialist friendship" outweighed any pragmatic judgments.

"Cost efficiency means a lot less to the Czechs," noted one academy expert dryly. "They had poured a lot of concrete and would have looked pretty silly with their half of the project if Hungary pulled out."

Officials of Hungary's national water authority in fact enthusiastically defend Gabicovo-Nagymaros and insist that its critics are misinformed.

"In Budapest, public opinion was against it," conceded Laszlo Nagy, a deputy department head at the authority. "But technical questions, in my opinion, don't belong to the judgment of public opinion. They belong to us, the experts. For us, this has always been a good investment."

Such bureaucratic intransigence has prompted many of the government's experts to cooperate quietly with the Danube Circle, turning over documents like the academy study and other critiques for publication.

"Whenever we need expert help we can get it," said Vasarhelyi. "The government doesn't want to allow an open debate, but indirectly, one is being created. That's a real accomplishment."