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The Falklands are back -- as campaign issue in Britain

Last year's Falkland Islands war has surfaced again - as a campaign issue in Britain. It is both helping and hindering Prime Minister Margaret Thatcher in her bid for reelection.

On the plus side, the Conservative leader still makes headlines by reminding voters that she achieved a famous victory and established the word ''resolute'' as one of her political hallmarks.

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But Mrs. Thatcher has also found that the ''Falklands factor'' can pose problems as the June 9 vote approaches.

A confidential draft report by an all-party House of Commons committee, which has spent the past 10 months considering the Falklands campaign, suggests that the prime minister's refusal to negotiate with Argentina on sovereignty is mistaken. A leaked version of the report proposes that Britain should seek talks with the Argentines aimed at achieving a ''lease-back'' arrangement for future control of the islands.

The report suggests that British claims of sovereignty over the Falklands are debatable. It also doubts whether Britain can afford the nearly (STR)2 billion (

Under lease-back, Britain would formally cede sovereignty to Argentina, but would exercise administrative control under treaty for a set period. This idea was being entertained by London and Buenos Aires before the Argentine invasion of April last year.

During the campaign, Mrs. Thatcher has faced probing questions on television about the sinking of the Argentine warship, General Belgrano, at the height of the Falklands campaign. Her parliamentary critics claim she ordered the ship to be sunk at the very moment a negotiated settlement proposed by Peru appeared likely.

In one television phone-in the Prime Minister appeared to run out of arguments about her approach to the Belgrano affair, prompting the respected Guardian newspaper to suggest that it was her weakest TV performance in the campaign so far.

Mrs. Thatcher has been counting on popular respect for her conduct in the Falklands affair as a forceful argument for her continuing in office. The Falklands war is seen by political analysts as a turning point in her premiership.

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Before the war, Mrs. Thatcher's popularity rating was sagging. Afterwards, she forged ahead of her leading opponents, who have not yet been able to close the gap.

Political commentators say Mrs. Thatcher's high reputation established during the Falklands conflict is unlikely to be seriously dented by her critics.

It is thought however that when the election is over, assuming Mrs. Thatcher wins, a new look will be taken at Britain's South Atlantic policy.

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