BUDAPEST, MAY 22 -- Janos Kadar, who led Hungary from the bloody suppression of its anticommunist revolution in 1956 to reforms of socialism that have become a model for the Soviet Bloc, was removed from his post as general secretary of the Hungarian Socialist Workers' Party at a special party conference today.

Kadar, who will turn 76 next week, was replaced by Karoly Grosz, 57, who will also continue in his post as prime minister. Kadar was given the honorary title of party president but was dropped from the ruling Politburo.

Grosz will lead a new party Politburo and Central Committee purged of many of Kadar's longtime allies and seemingly shifted toward proponents of rapid economic and political change.

Eight of the 13 members of the Kadar-led Politburo were dropped, along with 40 percent of the 100-member Central Committee. Among the six new Politburo members elected were the two best-known advocates in Hungary of radical political reforms, Patriotic People's Front chief Imre Pozsgay and Rezso Nyers, architect of Hungary's first economic reforms in the 1960s.

The leadership shift was the second to take place in the six Soviet-allied nations of Eastern Europe since Mikhail Gorbachev took power in Moscow in March 1985. Unlike Milos Jakes, the conservative and colorless politician chosen last December as the new Communist leader of Czechoslovakia, Grosz is considered an energetic and pragmatic politician who has adopted Gorbachev's open style.

{The Soviet news agency Tass said Gorbachev hailed Grosz as "a principled communist and authoritative leader" who had worked vigorously to develop friendship and cooperation between the two countries, Reuter reported. "I sincerely wish you, Comrade Grosz, big successes in your new responsible post in tackling the task of improving and renovating the socialist society on Hungarian soil," Gorbachev was quoted as writing to Grosz.}

Grosz's selection was finalized on the third day of a party meeting that included some of the most open public debates held by an Eastern Bloc communist party in recent years. Party leaders said the conference should assure Hungary's place in the vanguard of efforts to replace the Stalinist version of socialism with free-market economics and a more open political life.

Grosz, who built his career in the party political apparatus, has promised tolerance for opposition views within and outside the party.

"This conference marks a radical change," Grosz told Hungarian television. "We have faced critically the errors committed earlier. . . . A new approach is needed in public life, in production, in human sectors and other fields."

In a speech to the conference yesterday, Grosz said he seeks to expand democratic procedures within the party to match some of the "practical advantages" of western multiparty systems.

Grosz has rejected calls by a number of recently formed independent political clubs and social movements for legal acceptance and curtailment of the communists' monopoly on power. At the same time, he has appeared to forge a political alliance with party liberals who support independent groups and their demands, including Pozsgay and Nyers.

As prime minister, Grosz pushed for parliament's acceptance of a three-year economic stabilization program last September, including such austerity measures as cuts in state subsidies, the closing of inefficient state companies at the cost of moderate unemployment, and the gradual raising of prices and wages to world market levels.

He also pushed through a government reorganization last December, and last week he agreed on a stabilization program with the International Monetary Fund that will pay Hungary $350 million to help it repay its $10 billion foreign debt.

Kadar, who led Hungary as an isolated and occasionally beleaguered pioneer of economic reform after 1968, was seen as an obstacle to further change during his last years in power. Widely blamed for the country's growing economic problems, he resisted mounting pressure to retire and even during the party conference seemed reluctant to acknowledge a change reportedly agreed to at a Politburo meeting Tuesday.

Tonight, Kadar opened the session that announced his retirement and received a standing ovation from the 940 delegates as his honorary post was announced. In a brief statement, he said the conference had committed itself to progress and thanked outgoing leaders. He did not congratulate Grosz.

In one of his last moves as general secretary, Kadar halted debate today on a party political platform at a moment when the leadership appeared to be in danger of losing control to delegates demanding more radical policies.

The platform, which was approved moments after Kadar's intervention, contained plans for decentralization of decision making within the party and government, more democratic voting procedures in party organizations, limits on tenure in senior posts and other moderate reforms.

After the plan was presented to the conference by party ideology chief Janos Berecz this morning, western journalists and diplomats allowed to watch the conference on closed-circuit television saw a remarkably spontaneous debate as a number of delegates proposed amendments for considerably extended political reforms.

After meeting with the platform drafting committee, Berecz announced the leadership's acceptance of several proposed amendments but deflected calls for steps such as direct elections for party bodies and publication of the minutes of Politburo and other high-level meetings.

Berecz suggested that consideration of more radical political reforms should be deferred to the party's next congress, scheduled for 1990. When delegates persisted, requesting that their amendments be brought to a vote, Kadar interrupted the conference's chair to stop the debate.

Despite considerable criticism at the conference of Hungary's present situation, Kadar's overall record of leadership continues to be praised by even the most liberal party leaders. His tenure of 31 1/2 years, the second longest in Eastern Europe behind Todor Zhivkov of Bulgaria, encompassed both the bloodiest repression ever seen in postwar Eastern Europe as well as the most progressive reforms.

Moscow installed Kadar, a minister of interior during the repressive Stalinist period, as leader when Soviet tanks rolled into Budapest on Nov. 4, 1956. Days earlier, Kadar had disappeared from the capital after initially supporting initiatives by prime minister Imre Nagy to form a multiparty government and withdraw from the Warsaw Pact.

During the following five years, Kadar oversaw a sometimes brutal "normalization" of the country, including the trial and hanging of Nagy and other revolution leaders. After an amnesty in 1963, however, Kadar shifted to a policy of seeking compromise and consensus policies within and outside the party.

Until the mid-1980s, Kadar seemed to enjoy considerable popularity within Hungary, and though the reforms he oversaw are considered inadequate by the present party leadership, they surpass the changes implemented so far in the Soviet Union and other East European countries.