Praiseworthy morals, unwieldy fantasy; The Neverending Story, by Michael Ende. New York: Doubleday & Co. 397 pp. $15.95 .

This book is a cult object in Europe, a Book-of-the-Month Club Alternate in the United States, and is about to burst on our astonished gaze as an ''epic film.'' Its publishers are taking huge ads to make sure we know all this.

Alas, it takes more than ballyhoo to make a book worthwhile. Just to open this one is to suffer disappointment and be vividly reminded that it began its life in Germany as a child's book, for how can anyone take seriously a book published in colored ink? Worse, the first letter of every chapter is muddily illuminated - on a full page, no less - and separated so far from the rest of the word that the puzzled reader is faced with cryptic words like ''ladness.''

The contents match the packaging. The plot involves a small bookworm of a boy who starts to read a tale about an everchanging quest through a strange dreamland, peopled with fantastic beings including rock chewers, night-hobs, and Engywook. Gradually the boy is sucked so completely into the story that he is playing the leading role.

There are moments when Michael Ende's imagination takes wing, and he tells us of the terrifying ''nothingness'' that devours the landscape, and the huge luckdragons, ''as light as a summer cloud,'' which ''swim in the air of heaven as fish swim in water.'' But that hardly atones for the author's expectation that we'll take seriously a creature called ''cheesiewheezie.''

''The Neverending Story'' has been praised for the lessons it teaches, and certainly it lays down some praiseworthy morals. The transformation of this hero is designed to teach the importance of loving, and no one could quarrel with that, but it is hardly a startling revelation. More interesting are Ende's convictions that fantasy plays a vitally important role in the world and needs to be protected, lest it turn into propaganda, and that to recognize what one is wishing for is as difficult as it is important.

But morals, if they are to do their job properly, must be whipped up vigorously into the plot and not allowed to just lie there in undigested lumps.