Like cities and towns across the country in recent years, this picturesque New England community of 54,000 has watched its historic buildings decay and seen its downtown area deteriorate into a drab, sunless waste.

Nestled in the green foothills of the Berkshire Mountains, Pittsfield has seen three different developers size it up over the past dozen years -- then shake their heads and flee from what they deemed a hopeless situation.

Now a new developer is on the scene with plans to build a $100-million shopping mall smack on the town's main street. On the surface of it would seem that all of Pittsfield's problems are solved.

But not so.

Although Mayor Paul E. Brindle believes that "downtown Pittsfield will die without the mall," there are those who contend that the federally supported plan to revive the area will destroy much of what makes the town appealing.

The developer, Pyramid Companies of DeWitt, N.Y., submitted the redevelopment plan to the City Council last fall, and the council promptly approved it. Town bankers and key businessmen organized to promote the effort. The government awarded Pittsfield $14.2 million to help build 3,000 parking spaces.

Robert L. Ungerer, a partner in Pyramid, said the mall will be a "national urban model" combining the best elements of a suburban mall and a downtown setting. City fathers were confident that the project would enliven downtown; attract new businesses, shoppers and tourists; provide jobs, and bring in uncounted tax dollars.

In a matter of months something went awry. Today, many of the smiles have turned into grimaces as the result of an increasingly bitter battle over what should be built, how it should be built, what should be saved and what should be demolished.

Few will predict the battle's outcome. What will happen to downtown Pittsfield? Will it blossom anew or die?

Either way, Pittsfield dilemma is likely to be repeated across the nation as crowded suburbs, housing and energy shortages and renewed urban awareness have kindled in rebuilding and restoring deteriorating inner-city cores, and in acquiring more federal funds to do so.

In the spring of 1978, few residents of Pittsfield would have predicted the coming events in this quaint New England community -- steeped in history and tradition and in music and arts festivities. Herman Melville wrote Moby Dick here. Norman Rockwell's home in Stockbridge, Mass., is only a stone's throw away. But in New England, change often comes slowly.

Pyramid Companies, which has built more than two dozen shopping malls, had announced plans the previous year for a large mall several miles away in the suburbs of Lenox, Mass.

Officials in Pittsfield, the county seat and hub of retail and other business activities, objected to the drain such a mall would effect on its downtown. Former Gov. Michael S. Dukakis also opposed the mall's suburban location. He strongly urged the developer to consider a downtown Pittsfield building site.

Not particularly overjoyed at the prospect but not wanting to leave the county empty-handed, Pyramid decided to attempt its first enclosed shopping mall in an urban setting in downtown Pittsfield.

By November the company had submitted to the city its first plan to transform 21 acres bordering on North Street, the town's main thoroughfare, into a 600,000-square-foot mall enclosing five department stores and 80 small shops and boutiques, with two-level open-air parking for 3,000 cars. It was planned to open in late 1980.

Market surveys rated Pittsfield an excellent, untapped and semi-isolated retail market area of about 150,000 people.

Planners projected sales of $49 million in 1981, from the mall and $53 million by 1985. County residents would contribute 85 percent of the sales, but shoppers also were expected from neighboring states.

But some citizens of Pittsfield -- including merchants, preservationists, and even the city's urban designer -- looked hard at the proposed mall, its location, design, and integration with the rest of downtown. They worried that their town might lose more than it would gain.

Even some city officials who were quick to approve the plan are having second thoughts.

"What I'm scared of now is that we're going to create another downtown and destroy the one we have," says Charles Smith, a city councilman.

A small group of townspeople first began complaining last fall that Smith and other city council members approved the mall design in haste, without citizen participation, and without a thorough analysis of the city's business, social and cultural needs.

Some merchants in the blocks around the proposed mall site worry that putting a suburban-style mall downtown will ruin their businesses.

"I'd be wiped out," says Florence Morganstern, who with her husband, Seymour, owns several apparel businesses. Jeweler William Haims, who has renovated a building in the proposed mall area, is even angrier.

"This is the rape of a community," he says. "It's ruthless, relentless, tenacious. A whole community has been bullied and threatened by a developer who has refused to make changes."

In order to build the mall, the developer would have to raze the building containing Haim's store on North Street (the main thoroughfare through town) as well as several other older turn-of-the century buildings. North Street also borders on the town's historic Park Square, where many buildings already have been restored. If the old buildings on North Street have to come down, opponents of the mall plan say, the city will lose some of its charm and sever its link with the past.

The Advisory Council on Historic Buildings in Washington makes recommendations to the Department of Housing and Urban Development as part of the program under which Pittsfield won its $14.2 million grant. Sharon Conway, a council staff member, says her group can't complete its review until fall.