MONTREAL, Quebec-The largest city in Canada, haunted by two political kidnappings and now under martial law, grew measurably tenser yesterday as a small group of radical terrorists raised the stakes in the struggle with Prime Minister Pierre Trudeau's government.

The mutilated body of Quebec Labor Minister Pierre Laporte was found early yesterday morning in the trunk of a car parked at an Air Force base 30 miles southeast of Montreal. A member of the Front de Liberation du Quebec (FLQ), the group which kidnapped Laporte eight days ago, had earlier phoned a radio station here and given word of the killing.

Throughout the early hours of yesterday morning, rumors flooded television and radio networks that British Trade Commissioner James R. Cross-seized by the FLQ at his Montreal home two weeks ago-was also dead. But police received written word from Cross several hours later stating he was alive.

At 3 a.m. yesterday, a haggard but alert Trudeau read a nationally broadcast statement to officials and reporters gathered on Parliament Hill in the capital city of Ottowa, blasting the FLQ as "a band of murderers" and adding, "I cannot but feel, as a Canadian, a deep sense of shame that this cruel and senseless act could be conceived in cold blood and executed in like manner."

Additional troops were air lifted from outlying provinces into Quebec yesterday as riot-equipped city police patrolled the streets of Montreal and cordoned off several blocks of municipal office buildings in the downtown area. There are now an estimated 8000 troops ready to move on the city.

Laporte's murder came less than two days after Trudeau-acting at the request of Quebec premier Robert Bourassa and with the approval of his own cabinet-invoked Canada's War Measures Act, outlawing the FLQ and stripping the country of all civil liberties.

In the days before the proclamation of the Act-never before used in peace time-support had been growing in Quebec's political and intellectual circles for the goals of the FLQ, which advocates a nationally independent Quebec and the overthrow of its capitalist economy.

Hours before the proclamation, Montreal students sponsored a rally on behalf of the FLQ's political manifesto. The demonstration attracted a tumultuous crowd of 5000.

Students and faculty at the University of Quebec in Montreal voted the day before Trudeau's announcement to close their institution until the Quebec government met the demands of the FLQ.

The students-mostly French-Canadians-seized one building and turned the administration into an information center. After the enactment of martial law, police broke up the information center without making arrests. One building is still occupied.

The emergency measure-in effect until April 30, 1971-has given the government's forces wide powers to arrest all FLQ members and sympathizers and hold them without trial for a 90-day period. Proof of membership in the FLQ or support of its methods or goals now carries a five-year prison term.

Under the law, police are not required to announce the arrests until one week after they are made. Officials estimate however, that almost 300 political activists have been jailed so far in the largest police manhunt in Canadian history.

The massive search-and-arrest campaign has all but ended peaceful political organizing by those who believe that Quebec, with its 85 per cent French population, should be separated from the nation whose political and economic apparatus is dominated by Canadians of English descent.

The FLQ is a secret underground organization with an estimated 150 members who operate in autonomous cells of four to six. It kidnapped Cross and Laporte in order to secure the release from prison of 23 of its members who had been convicted of armed robbery, arson, bombings, or murder.

In a harrowing sequence of negotiations and deadlines, the government ordered a series of extensive police raids to find the kidnappers, and FLQ lawyer Robert Lemieux reiterated that he had "no doubts" that Cross and Laporte would be "executed if the kidnappers' demands are not met."

Even after the extension of police powers with the announcement of the War Measures Aet, authorities failed to identify and apprehend any but a few of the most outspoken and publicly-known FLQ members, such as Lemieux, who was one of the first to be arrested after the measure went into effect.

Instead, police have seized many of the government's critics who are not otherwise associated with the FLQ.

Many of those arrested have been members of the Parti Quebecois, a separatist political party which won 23 per cent of the popular vote in Quebec's parliamentary election last April.

The reaction of Montrealers to the current situation is mixed. One Irish-Canadian student denounced Trudean for "treating politics like a power game. It's like Kennedy in the Bay of Pigs, Trudeau has now joined in that great tradition of politicians disappearing up their assholes."

However, one student from France criticized the French Canadians for being nationalistic. "They are dirty, they are stupid, they don't clean their windows," he said.

"They have no culture, they have no anything," he added.

"They can't speak the language. And they call theirselves [sic] French? HAH! Phhh..." And he spat on the cafe floor.