In his native West Germany author Michael Ende is a phenomenon. In 1979 his children's fantasy novel, The Neverending Story, soared to No. 1 on that country's best-seller lists. Within a couple of months two other Ende works, Momo and The Mirror in the Mirror, rose to the second and third spots, respectively. Critical reaction, says Ende, "ranged from amazement to black rage. You can enter the literary salon from prison, from the insane asylum, from a whorehouse—everywhere but from the children's room."

The hero of The Neverending Story is a shy, fat boy named Bastian Balthazar Bux, who escapes from his sorrow-filled world by becoming absorbed in the pages of The Neverending Story. This book-within-a-book is set in the land of Fantastica, which is gradually disappearing because people have lost interest in fantasy. Bastian's aid is enlisted by Atreyu, a young hunter from Fantastica. It becomes Bastian's mission to save Fantastica by re-creating it from his own imagination. Before his odyssey ends, he has learned how to love and to dream and to believe that dreams can come true.

Although Ende, who considers himself apolitical, didn't intend it, the book, with its Utopian message, became the bible of antinuclear activists. The Neverending Story stayed at the top of the charts for more than three years, sold more than one million copies in West Germany and has been translated into 27 languages. Doubleday's hardcover edition, which came out in the U.S. last October, has sold more than 100,000 copies. Paperback rights have been bought by Viking/Penguin for six figures. It is the first of Ende's novels to be published here.

It is no surprise, therefore, that the film (there are two versions, one in German, the other in English) is enjoying similar success. Directed by Wolfgang (Das Boot) Petersen, the movie has grossed more than $12 million in West Germany alone. It opened in 1,000 theaters across the U.S. last month. A special-effects-filled confection, it cost a whopping $25 million to make—the most expensive German production in history.

Nevertheless, Neverending received some lukewarm reviews, the most critical of them coming from Ende. A usually reserved and thoughtful man, he held an impassioned press conference in Stuttgart last April to denounce "that revolting movie" and demanded that his name be removed from the credits. It was. "The makers of the film simply did not understand the book at all," he complains. "They just wanted to make money."

Ende, who pocketed only $50,000 for the rights, was not initially opposed to translating his work to film. In fact he and Petersen collaborated on a script. "I worked as an adviser," says Ende, "because I wanted a beautiful movie. I trusted them."

Ende charges that Petersen later secretly rewrote the screenplay. "I saw the final script five days before the premiere and only as a result of a judicial verdict in Munich," says Ende. "I was horrified. They had changed the whole sense of the story. Fantastica reappears with no creative force from Bastian. For me this was the essence of the book." Still, Petersen insists that his film is "very faithful" to Ende's novel.

Born in Garmisch-Partenkirchen, Ende was the only child of surrealist artist Edgar Ende and his physiotherapist wife, Luise. In 1947 he enrolled in Munich's Otto Falckenberg actors' school. "The parents of my first girlfriend paid my tuition," he says. "They wanted to get me away from her." He began writing satiric sketches for cabarets, then did film and theater reviews for Munich radio. One day an artist friend asked Ende to write the text for a children's book he was illustrating. The result: 1960's Jim Button and Luke the Engine Driver, his first best-seller. "I had no idea how to write a children's book," recalls Ende, who relied on his childhood memories. He has also penned two plays.

Ende, 54, and his wife of 20 years, former actress Ingeborg Hoffman, 63, share their seven-room house in the hills outside Rome with five cats, two dogs and five turtles. They have no children, but Ingeborg's son from a previous marriage lives in West Germany. Although much of Ende's fame and fortune derives from myth, when it comes to the changing tastes of the reading public he is a realist. "Books float on a wave of fashion," he shrugs. "Soon they will switch to things other than fantasy." He is less complacent about the future of film, especially the sequel to Neverending, which is now being planned. In an attempt to halt the project, the frustrated author has brought suit against the movie's German production company for breach of contract. Of his seeming inability to let The Neverending Story end, Ende says simply, "My moral and artistic existence is at stake in this film."