LISBON, AUG. 17 -- Prime Minister Anibal Cavaco Silva took office today at the head of a new conservative government with a pledge to use an unprecedented majority in the Assembly to overcome the economic backwardness that separates Portugal from its European neighbors.

Cavaco Silva, 48, said the "great struggle" now is to free the economy from state control and a stifling bureaucracy, encouraging the development needed to compete within the European Community.

The prime minister, whose conservative Social Democrats won a landslide electoral victory July 19, installed a Cabinet of economists and technocrats to tackle the task. Eleven of the 15 ministers are younger than 45 and four are in their 30s.

Cavaco Silva's choice of government officials, several of them conservative former Christian Democrats, is expected to accelerate application of market-oriented economic policies that include selling of state enterprises.

The prime minister said, however, that analysts would be frustrated in trying to label his government because "ours is a markedly national program that doesn't respect coventional political reasoning or ideological barriers."

Cavaco Silva observed that his swearing-in marked the end of a revolutionary era that began when young Army captains toppled Europe's longest running dictatorship in a 1974 coup, and noted that his victory was "almost without precedent in Western Europe," enabling "a single party to implement a government program without fear of systematic obstruction."

The Social Democrats won 50 percent of the vote and 148 of the 250 seats in the Assembly, a majority that virtually assures the government of becoming the first since 1974 to complete a four-year term. There have been 16 short-lived coalitions and minority governments.

Portugal joined the EC in January 1986 as its poorest member, with an average per capita annual income of less than $3,000. The country's outdated industries and unproductive farms are preparing for competition from other EC members as trade barriers gradually are dismantled.

President Mario Soares, a Socialist and former staunch opponent of Cavaco Silva, pledged his full support for the new government but stressed the Social Democrats' obligation to use their majority to achieve modernization, so long delayed by successive political upheavals.

Cavaco Silva is committed to removing ideological sections from the Marxist-inspired constitution of 1976 that describe Portugal as a society in transition to socialism and to striking out clauses that define sweeping post-1974 nationalizations as irreversible "conquests of the revolution."

More than half of the country's industries and services were brought under state control by revolutionary governments. But massive state companies have proved inefficient and overmanned, accumulating crippling debts that have stunted economic growth.

The government is now preparing for a drastic streamlining of the state sector, outlining policies that will create "worker capitalists" by selling stock in state companies to small savers and employes in a denationalization program apparently inspired by the ideas of British Prime Minister Margaret Thatcher.

Fierce opposition is expected from the pro-Soviet Communist Party and the major unions it dominates. They defend the nationalization of banking, insurance, steel, shipping, cement and transport as the major achievement of the revolution and fear the loss of jobs that privatization threatens.