The take-over of a failing helicopter company is not usually the kind of event that can threaten a confident and strongly led government. But the Westland affair has set off a savage internecine quarrel within Britain's ruling Conservative Party, and the prime minister, Margaret Thatcher, seems to be having difficulty bringing it under control. It is a case of a decision that has only modest significance in itself, yet reaches concerns of such deep sensitivity that the whole government vibrates.

Westland is a private company that builds helicopters for the British armed forces, among other customers, and its business is declining. It's the dilemma of the arms industry in a middle-size country that needs highly sophisticated weapons but is not big enough to support the kind of companies that can make them. Westland's management was in the process of selling a controlling interest to Sikorsky, the American helicopter company, when the minister of defense, Michael Heseltine, hastily organized a counteroffer from a consortium of European aircraft companies. Under the Sikorsky deal, Mr. Heseltine charges, all the technology would come from the United States. The European consortium, he argued, would strengthen cooperation with other countries whose forces are on a scale similar to Britain's. But he wasn't getting any support from Mrs. Thatcher, he concluded, and last week he walked out of a rancorous Cabinet meeting and resigned.

This week he carried his case to the House of Commons, where he subjected Mrs. Thatcher and her minister of industry to unpleasantly sharp cross-examination. There's more to it than military procurement. Mr. Heseltine belongs to the wing of the Conservative Party that considers government intervention in industrial policy to be a desirable and necessary thing. Mrs. Thatcher puts her faith mainly in the market, and believes that unsuccessful helicopter companies are best left to work out their own destinies. This debate takes place in the context of the long decline of British manufacturing industry and of financial anxieties heightened by forecasts of severe declines in the price of the oil that Britain exports.

And then there is the calendar, which reminds British politicians that they are just over half way from the last national election to the next one. Mrs. Thatcher evidently intends to lead her party into it, but it would be an extremely rare feat for a party leader to win three elections in succession -- and present circumstances are not ideal. While Mrs. Thatcher has brought down inflation, the unemployment rate -- around 5 percent when she took office in 1979 -- is now over 13 percent. Mr. Heseltine's interest is not limited to helicopters. In preparation for the next election, he appears to be challenging Mrs. Thatcher for leadership of the Conservative Party.