Three tiny republics on the Soviet Union's western fringe are showing Mikhail S. Gorbachev's Kremlin the benefits of its new reform policies but also the dangers of loosened central control and greater local initiative.

After a 1939 pact between Nazi Germany and the Soviet Union deeded control over Estonia, Latvia and Lithuania to the Kremlin, the Russians kept a tight grip on the three mini-states along the Baltic Sea.But President Gorbachev, the Communist Party chief since March 1985, is promoting more local autonomy in a bid to revive the stagnant national economy.

Moscow's relaxed embrace and greater tolerance for local initiative and opinion may have let the genie out of the bottle in the nationalistic, prickly Baltics, with unforeseen consequences for the Westward-looking republics and for the multi-ethnic nation as a whole.

"We have been reduced to the level of slaves in a manor," one Estonian, Enno Petts, complained during October's organizational meeting of the People's Front, an independent group seeking more say for Estonians over their own affairs.

As a sign of Kremlin concern over rising disaffection in the Baltics, three members of the ruling party Politburo flew there last week. In remarks reported by Soviet media, they promised increased economic and cultural automony but ruled out any restoration of independence, which ended for the Baltic states in 1940 when the Red Army marched in.

"It is possible to receive independence and to lose everything else," Politburo member Viktor M. Chebrikov told Estonians on Saturday.

Growing clamor in the Baltics has focused on Gorbachev's blueprint for political change. Activists say the changes will annul their republics' right to secede - now recognized in theory by the 1977 Soviet Constitution - and shift economic and social control to Moscow.

The political transformation, which also creates a new national congress and a powerful presidency, leaves the republics "with fewer rights than a province of czarist Russia," said the newspaper Sovietskaya Estonia, summing up complaints voiced at a recent meeting of Estonia's People's Front.

The 60,000-member People's Front sent a telegram to the Soviet leader complaining that "these drafts are a step backward in the development of electoral democracy."

The Latvian Peoples' Front also has rejected the proposed reforms, and an equivalent group in the third Baltic republic, the Lithuanian Restructuring Movement, plans to meet to discuss the issue.