Royal Shakespeareans offer an unsettling play set in Nazi Germany; Good Play with music by C. P. Taylor. Starring Alan Howard. Directed by Howard Davies.

This production examines and exposes the evils inherent in the sacrifice of moral and intellectual integrity to the demands of a brutal dictatorship. The late C. P. Taylor called his last work ''the tragedy which I have written as a comedy, or musical comedy.'' The incidental melange of German schmaltz, American pop, and the classics is integral to the Royal Shakespeare Company production at the Booth Theater. From the moment an instrumental quintet begins assembling on the almost bare stage until the final, emotionally shattering strains of Schubert's ''March Militaire'' by a pitiful Auschwitz orchestra, music adds the frequently ironic italics to the text.

The ambivalent antihero of ''Good'' is John Halder (Alan Howard), a Frankfurt critic and novelist whose professional advancement parallels the rise of Nazism. A novel in which Halder has upheld a specific case of euthanasia is seized upon by the party. Through a succession of contacts up to and including Adolf Eichmann (Nicholas Woodeson), Halder responds to the demands for treatises that supply intellectual and philosophical justification for Hitler's crimes, including the extermination of the Jews.

Halder's series of moral crises is reduced to personal terms through his close but fraying friendship with Maurice (Gary Waldhorn), a Jewish psychiatrist , and his growing contacts with Nazi types. Although committed to the familial obligations due his slatternly wife (Meg Wynn-Owen) and institutionalized mother (Marjorie Yates), Halder nevertheless enters into an affair with an impressionable student (Felicity Dean). The dense and complex drama moves forward in multilayered fashion as the equivocating Halder grows ever more intellectually and morally compromised.

Near the end of the play, the writer's young mistress assures him, ''Whatever happens . . . round us. . . . however we get pushed . . . I know we're good people.'' To which Halder replies: ''Yes. . . . We probably are good. . . . Whatever that means.'' By then, of course, the inhuman results of human betrayal have robbed goodness of all its meaning.

In view of the thoroughness with which Taylor scrutinizes the phenomenon of the ''good'' Germans who became Nazis, there seems to be a missing element in the Halder equation. The audience is shown or told about such things as the man's early conditioning, his discharge of domestic duties, respect for uniforms , and his fantasy addiction to music. But why should he display a consistently overriding lack of integrity and moral courage? Furthermore, it is somewhat difficult to believe that a man of Halder's thoughtfulness and intelligence should so easily comply with fascism and so readily accept Hitler's crimes as a temporary ''aberration.''

In the central role, Mr. Howard makes no appeals for sympathy. The bodily squirmings, the grimaces, and the extraordinary line readings add up to a stage portrait of memorable insights and psychological dimensions. Pale, rumpled, and bespectacled, the star moves restlessly about the stage. His Halder is a man caught up in a destiny of his own making - a destiny from which he lacks the moral daring to escape, a destiny symbolized by the SS uniform he finally dons.

The performance staged by Howard Davies is truly an ensemble venture. When not directly participating, the RSC players become spectators, in the fashion of other recent British productions. Among the principals in this fine company, Mr. Woodeson doubles as Eichmann/Bouller, while David Howey appears as both Hitler and a minor go-between whose obscenities, like others in the play, express a pervading crudity.

Mr. Waldhorn's Maurice, a Germanic Jew who ''can't stand'' his fellow Jews, begins with sophisticated bravado and ends on a note of agonized desperation. Blond Pip Miller personifies cheerfully ruthless young Nazidom, in this case beset by a gnawing fear.

Perhaps because of the nonrealistic way in which it is presented, ''Good'' is unsettling without being emotionally tearing. Enormous concentration is demanded of the actors, who occupy a constantly exposed position under the relentless glare of Beverly Emmons's floodlighting. Except for uniforms, the costuming is nondescript. Designer Utz's use of the bare stage to the back wall creates an abstract scene at the same time neutral and ominous. The casually dispersed musicians make their own indispensable contribution to this troubling ''tragedy written as a comedy'' on a momentous theme.