IT STARTED WITH THE CAGED LOVEBIRDS. SEVEN YEARS AGO movie producers Lauren Shuler-Donner and Richard Donner (who is also the Lethal Weapon director) got a pair as a wedding gift. But within a few days they decided the sight of animals in captivity was more than they could bear. They ended up giving the birds away.

Now the Donners are troubled by the thought of another, much bigger animal in a cage—a 7,000-lb. orca named Keiko. Keiko is the costar of Free Willy, the Donner/Shuler-Donner-produced summer hit in which a young streetwise kid befriends a lonely killer whale confined in a Pacific Northwest theme park. In the movie, Willy is freed in the final reel. In real life, Keiko remains pent up in a Mexico City amusement park in a tank that is just 22 feet deep and 196 feet long. His dorsal fin droops from the lack of exercise, and he has a nasty psoriasis-like skin disease. "Basically," says Donner, 63, "you've got a 13-year-old whale in a tank made for a 4-year-old." Adds Lauren, 44: "Now he's 22' long! You look at him, and you say to yourself, 'Oh, my God, he's still growing! Where will he go?' "

Back to the ocean—if animal rights groups have their way. Since the movie's release, many organizations have mounted demonstrations at aquariums around the U.S. Earth Island Institute, which at the Dormers' invitation has its 800 number flashed on the screen at the conclusion of Free Willy, urges viewers to help end the hunting of sea mammals. "Just like hunters wish Bambi had never been made," says Wayne Pacelle, director of the Fund for Animals, "I'm sure aquatic parks wish Free Willy had never been made."

The truth is Keiko has probably been in captivity for too long to be successfully returned to the wild. Captured off the coast of Iceland at age 2 in 1982, he was sold to Marineland in Niagara Falls, N.Y., and resold to El Nuevo Reino Aventura, a Mexico City amusement park, in 1985. The Donners found him there two years ago, after an eight-month search for a trained orca they could cast as Willy. "The research suggests that Keiko wouldn't know how to fend for himself in the wild," says Shuler-Donner. "Tie doesn't have a pod [family]. He'd be a lone whale out there. Putting him back in the ocean wouldn't be helping him. It would be killing him."

The irony is, the animal rights hoopla surrounding Free Willy notwithstanding, Donner would love to see Keiko at a Sea World marine park, "where," he says, "he'd be treated beautifully, given a good life and maybe even have a girlfriend." The owners of the Mexican park are more than ready to sell him—for $1 million. But no one is jumping at the offer because of Keiko's skin condition, which marine experts say could be contagious.

This is where the Donners—and Free Willy's distributor, Warner Bros., which has kicked in $200,000 so far—come in. They are mulling over a way to turn an inlet near Cape Cod into a holding pen for Keiko—and possibly other marine animals. "It's really exploratory right now, just a dream," says Donner, who is still haunted by the last day of shooting in Mexico City, when Keiko leaped out of the water several times without being prompted.

"They were really beautiful breaches, and he did them all on his own," says Donner. "He knew, I really think he knew that we were about to leave. There were certainly a lot of wet eyes when we pulled out of there."

WILLIAM PLUMMER
JOHNNY DODD in Los Angeles and JAIME RENO in San Diego