TORY DEFEAT DEALS BLOW TO MAJOR.

Byline: Sarah Lyall The New York Times

Somehow defiant, even after his party's second-worst local election defeat in recent history, Prime Minister John Major promised Friday that his Conservative government would fight for ``the heart and soul and future of this country'' and go on to win the next general election.

But despite Major's confident words, no one could argue that his political position was anything but precarious. On Thursday, Tories across the country were skewered in local elections that were seen widely as a referendum on Major's government, which is clinging desperately to its one-seat majority in Parliament as it braces for a general election in the coming year.

The results, coming on the heels of dissatisfaction over the Tories' handling of the ``mad cow disease'' crisis and the perception that the party is crumbling under the weight of its own internecine arguments, have left a deep impression here that the government is fighting for its life.

When it became clear that the Tories had won just 28 percent of the vote in elections for 3,000 local councils, the best anyone in the party could say Friday was that they were relieved it had not been as bad as last year, when the Tories won only 25 percent of the vote.

The elections have no bearing on Major's one-seat majority in Parliament, but they are an ominous reflection of the public temperament.

``These elections are important because in very few constituencies are local issues at stake,'' said Anne Applebaum, a columnist for The Evening Standard of London. ``In almost every one, the main issue is the prime minister, the party and the government. It's as if people were using the elections simply to express their opinions about the prime minister.''

With all the votes counted and a few seats still in dispute, the Tories had lost a total of 537 council seats, about half of those they were defending. Labor won about 44 percent of the vote and gained 434 new seats. Some 143 seats were won by the Liberal Democrats, a strong showing by the country's third-largest party.

Much to their dismay, the Tories lost in several regions that are seen as key areas for them. The Liberal Democrats won control of Tunbridge Wells, a traditional Tory stronghold. The Labor party won in Basildon, home of the so-called Essex Man - the working-class voter not wedded to a particular party - and a linchpin of the Tory election victory in 1992, and in Peterborough, important because it is the constituency of Brian Mawhinney, the Conservative

Party chairman.

The Conservatives, who have been in power since 1979, have in recent months been mired in a seemingly endless series of internal squabbles over the direction of the party, particularly regarding its relationship with Europe.

Major's position has not been helped this spring by the crisis over the mad cow disease, widely perceived to be a public relations, financial and policy disaster for his government. At the same time, he is fighting the perception that some of his fellow Tories, including Michael Heseltine, his deputy, and John Redwood, a leader of the party's right-wing, anti-Europe faction, are jockeying for his job.