Decorator Diana Phipps finds shortcuts to luxury

With paint brushes, sewing needles, and staple gun in hand, Diana Phipps bypasses expensive professionals to create luxurious rooms at minimal cost. A decorator who isn't concerned with contracting schedules, ordering merchandise, or fancy decorator showrooms, she is adept at making everything from fireplaces and furniture to the fringe on chairs.

Mrs. Phipps is something of a compulsive decorator. Her own homes, one in London and one in Oxfordshire, are never in a completely finished state as she continually tries new shortcuts to her ideal of richness and comfort.

She has worked mainly for herself and friends on projects ranging from decorating one-room apartments to renovating an English country barn. As a rule, she prefers to take on a dilapidated house or a problem room with low ceilings and squat windows rather than decorate a perfectly proportioned home.

''When something is perfect already, it demands too much respect. It's more exciting to make something out of nothing,'' she says.

Mrs. Phipps's decorating style is hard to pinpoint. It leans toward 19 th-century European, but she also draws from other periods and continents. The trademarks of her improvised opulence include draped beds, fabric-covered or paneled walls, plush furniture, rich colors, and glistening wood and gilt.

Mrs. Phipps became accustomed to grand surroundings at an early age. Born Countess Diana Sternberg, she grew up in a castle in Czechoslovakia until the German occupation of 1938 eventually forced the family to give up its holdings.

''As the war progressed, we had less and less of the house,'' says Mrs. Phipps. ''We had to move from floor to floor.'' That's when her mother's ingenuity came into play. ''Mother made clothes out of curtains and curtains out of clothes,'' she recalls.

The family regained their properties at the end of the war, only to lose them to the communist takeover in 1948. Later the family emigrated to the United States. That's when Diana Phipps started to devise her own techniques for creating beautiful rooms out of inexpensive materials.

One of the key principles in her decorating approach is to use what already exists, adapting it rather than throwing it away. She will take a pair of old, well-made curtains, for example, and cover them with a new lightweight fabric. Taking advantage of her ''camouflage'' techniques, she may disguise unsightly kitchen cabinets with trompe l'oeil, or paint a damaged table to look like wood or marble.

Another trick she uses is to take one very good piece of furniture, art, or fabric and surround it with less expensive materials.

''It's extraordinary how one good bit picks up everything else. It gives you a guideline for what to do,'' she says.

But ''investment'' pieces are seldom necessary to the total effect and are low on her list.

''Things to last a lifetime have always depressed me. They're so final, so binding. Better to spend less in the first place and furnish with fantasy than spend a lifetime stuck with the same boring investment,'' she writes in her new book, ''Affordable Splendor'' (New York: Random House, $20.00). The book is entertaining, and the explanations are illustrated and easy to follow. A section of color photographs shows rooms Mrs. Phipps has decorated.

The imagination can be triggered by textile museums, exhibits, paintings, and even shapes in a junkyard. Mrs. Phipps recommends toy shops as a great source for finding little plastic objects that, when painted, can become decoration on picture frames, furniture, and moldings.

When scouting flea markets, auctions, and junkyards for old furniture and objects to resurrect, she looks beyond tattered upholstery, exposed springs, or chipped paint for a pleasing general shape.

In decorating a room, Mrs. Phipps will combine different styles and periods of furniture in a room as long as the proportions harmonize.

''You can always pull it together with something,'' she says.

Mrs. Phipps often uses fabric as the unifying element because it is economical and gives quick results. She uses it to create tents on ceilings, cover walls, make pillows, reupholster furniture, and cover almost anything. She has found that fabrics hold up better on walls than paint, especially if a darker shade is chosen.

Her main sources are department stores and wholesalers, where she finds cheap bolts of dress fabrics. Fabric-hunting is ''a paradise'' in New York, she says.

It takes some amount of experimentation and confidence to follow Mrs. Phipps's decorating example. But once the ideas get going, she says,''The only thing people may lack is the courage to let loose and do what they want.''