A conference to thrash out a proposal for merging the whites-only provincial council of Natal and the all-black legislative assembly of the KwaZulu tribal "homeland" is being held in the province's principal city of Durban.

Although ostensibly a purely regional option, the idea of the merged regions run by a single, multiracial legislature that would have to reach decisions by consensus is being floated here as a possible model for the country as a whole. It would steer a middle course between the modified apartheid system President Pieter W. Botha is trying to establish and the black majority rule that the African nationalists want.

The key figure behind the idea is the moderate Zulu leader, Chief Gatsha Buthelezi, who is chief minister of the homeland administration and likely head of the multiracial legislature if it is formed.

The proposition is finding strong support among opposition whites, particularly businessmen, in a province which is the heartland of the British-descended community that numbers 40 percent of South Africa's whites. While not actively supporting it, the predominantly Afrikaner government appears to be watching the development with cautious interest.

African nationalists, who favor black majority rule, strongly oppose the plan, which they describe as a "Muzorewa option" -- reminiscent of the deal that made Bishop Abel Muzorewa the token black prime minister of Zimbabwe-Rhodesia in the last days of white rule in that country.

The nationalists see the plan as a device to use Buthelezi to defuse the intensifying political conflict, while leaving the existing, unequal distribution of political and economic power between whites and blacks largely intact.

The conference also has been condemned by white groups of the far right, which see it as the thin end of a wedge that will lead to black majority rule.

Emotions are running high among opponents on both sides, and the office of a scholar closely connected with Buthelezi and the merger plan, Prof. Lawrence Schlemmer, was destroyed in a gasoline-bomb fire at Durban's Natal University two weeks ago.

In his keynote address to the conference, Buthelezi warned of the likelihood of further violence, claiming that extremists were intent on sabotaging an initiative by moderates to find a solution to the country's problems.

Buthelezi's speech also struck a hopeful, almost apocalyptic, note. He described the conference as a "tryst with destiny" and an opportunity to "banish violence from our political scene."

The "KwaNatal option," as the plan is being called, was first suggested four years ago by a commission of academicians and other specialists appointed by Buthelezi. It was given a cool reception by the Botha government at the time.

It has been revived now jointly by Buthelezi and Frank Martin, the leader of the majority New Republic Party in the provincial council, as Pretoria begins restructuring the second-tier level of government as part of its constitutional reform program.

The restructuring includes the abolition of provincial councils at the end of June, a move that has spurred Martin and his party to seek a new role for themselves.

Thirty-one business, farming, community and political organizations are attending the conference. The plan is expected to be formulated through a painstaking process of seeking consensus among the groups taking part in the conference over a period of about six months.

If agreement is reached, the plan's proposers will ask the Botha government to implement it.

The government's response is uncertain. On the face of it, the plan presents problems for Pretoria. The government is in the process of replacing the elected white provincial councils with a complicated structure of multiracial "regional services councils" and appointed provincial committees. There is no room in this for a regional legislature.

A multiracial legislature, moreover, would cut across the Botha government's careful preservation of structures giving whites, blacks and coloreds power to decide separately certain of their "own affairs," and leaving "general affairs" to the group as a whole in the modified apartheid system it is trying to construct.

On the other hand, some observers believe the government is becoming desperate. They point out that with township councils collapsing in the face of continuing insurrection by activist groups, the government is having trouble finding blacks willing to participate in the new regional services councils.

These observers believe the government also badly needs to get a black leader like Buthelezi, who has considerable following, on its side to give its disintegrating reform initiative some legitimacy.

Some provincial leaders also suggest, a little wryly, that the government regards the English province of Natal as being something of a maverick, and could be disposed to let it go its own way in what could be regarded as a regional experiment involving few Afrikaners.

As one delegate put it, "If the experiment succeeds, it may become possible to introduce similar 'local options' elsewhere and gradually move toward a federation of different regional systems.

"If it fails, it can be passed off as something the foolish Engelse Afrikaans for the English asked for that once again demonstrates the soundness of Afrikaner judgment in matters of race."