'EVERYONE is talking of nothing else,' said critic John Leonard, and he didn't mean Bush or Bosnia. Wherever one went in Manhattan, people who at the start of last week were stunned and speechless were pouring out opinions in the case of Farrow versus Allen.

Woody Allen's declaration of love for 21-year-old student Soon- Yi Previn - 'She's a lovely, intelligent, sensitive woman who has and continues to turn around my life in a wonderfully positive way' - has been ridiculed up and down the island for its morals and its diction. The 56-year-old Allen's abandonment of Mia Farrow, 41, his lover of the past 12 years, for her Korean adopted daughter has brought down a hail of indignation on the film-maker long considered New York's own combination of Groucho Marx and Ingmar Bergman.

With every day last week, the story became more complicated and unpleasant. Police are investigating a claim that Allen molested his and Farrow's seven-year- old adopted daughter; it has been reported that a babysitter walked in on the two of them, a charge Allen denies. Allen is suing Farrow for custody of the little girl, an adopted son, and his and Farrow's natural son. Allen's friends have been saying that Farrow beat Soon-Yi black and blue when she discovered the affair and disinherited her.

Farrow has been criticised for hiring Alan Dershowitz, the flamboyant defender of Claus von Bulow, and for exposing her children (four natural, seven adopted) to so much publicity. Other members of her family have publicly taken sides about the affair. Farrow's mother, the actress Maureen O'Sullivan, has called Allen 'desperate and evil'; and one of Farrow's sons has given an interview saying that he believes the molestation charges. A local TV station has seen a video tape (which Farrow says must have been stolen) in which Farrow questions the seven-year-old about her relationship with Allen. But Allen has taken most of the heat, which has been turned on by some of Manhattan's most blase and irreverent media people.

'If he'd left Mia Farrow for any other 21-year-old, who would care?' says Kurt Anderson, editor of the satirical magazine Spy. 'But, as the father of two daughters, I think this is just disgusting. I can't imagine a mitigating circumstance that would make me feel less than revulsion for Woody Allen.' There is one thing he likes about the affair, however: 'It's the perfect summer story.'

Anderson identifies himself as a liberal, but his opinions are echoed by a polar opposite, the conservative anti-feminist writer Midge Decter. 'It's a truly loathsome, grubby story. He's a complete narcissist, so if he says he loves somebody, it makes you laugh to think what that emotion might be. You've got to think he's motivated by the desire to do something ugly to his wife (sic), but we're supposed to think he's blameless about everything because he's so neurotic and full of angst.'

Anderson's and Decter's comments highlight the prevalent feeling that although Farrow and Allen are not married - indeed, never lived together - and Soon- Yi was an adopted child (rescued from a Seoul orphanage by Farrow and her ex-husband Andre Previn), his behaviour is de facto incest. Indeed, a spokeswoman for the Family Life Center and the Step Family Association, as well as authors of books on child care, have weighed in with their opinion that, in the words of one, Allen has committed an unforgivable breach of trust.

The presenter of a popular radio chat-show asked, 'What I want to know is, when did he first touch her?' and whether or not people suspect Allen of having seduced Soon-Yi before she reached the age of consent, they are troubled by the idea of his having watched her develop since she was nine. Nat Hentoff, political columnist at the left-wing Village Voice, said: 'I have stepdaughters myself. If they're in the same household, you treat them the same as your own daughters. There is a line, and I think he has crossed it. I wonder if, at this point in his grandiloquent career, he doesn't think he can have everything he wants.'

A more forceful point of view was expressed in a cartoon by Edward Sorel for the liberal Nation magazine, of a poster supposedly advertising Allen's next movie. Though the editor, Victor Navasky, refused to print the drawing, the movie title became New York's joke of the week: 'Honey, I F***** the Kids.'

New Yorkers are also considering the idea that Allen's love life is reflected in his films. Allen's first wife was Harlene Rosen, a 17-year-old girl when they married in 1956. (They divorced in 1962.) A recent biography by Eric Lax, Woody Allen, quotes a letter from the early days of the marriage in which Allen refers to 'my humble wife (she walks five paces behind me at all times),' which is funny if you believe a joke is just a joke. Allen's second wife (1966- 69), the actress Louise Lasser, specialised in dizzy, lost characters, as did Diane Keaton, with whom Allen had an affair and made several movies. (Keaton, presumably, is not among the indignant: she has replaced Farrow in a role that suddenly became vacant in Allen's next film, Manhattan Murder Mystery.) Meanwhile, screenings have begun for Husbands and Wives, Allen's latest film, which stars, opposite him, the perpetually fragile, woebegone Farrow. It concerns a college professor (Allen) with whom a young student becomes infatuated, and Allen and Farrow (who plays his wife) are seen arguing about emotions and sex. Movie- goers have also been remembering that in Manhattan (1979), Allen played a middle-aged man involved with a teenage girl.

This kind of association troubles David Denby, the film critic of New York magazine. 'I dread the idea of everyone looking at the movies and revaluing them in terms of this story,' he says, but he thinks Allen cannot altogether dissociate himself from his past work. 'All his recent films have been about making moral decisions. How difficult a moral decision is it to decide not to sleep with your girlfriend's daughter?'

Former New Yorker film critic Pauline Kael refuses to speculate about New York's most famous analysand (now on his fifth doctor, he has been seeing a psychiatrist since 1959). 'Anyone who would talk is a horse's ass without the imagination to see how he could get caught in a mess like this. It's a time for sympathy, and people are moralising, perhaps because they took the moralising in his movies so seriously.'

One place where Allen has been taken very seriously indeed for the past 20 years is the New York Times. Its chief film critic, Vincent Canby, calls Allen 'America's most authentic, most serious, most consistent film auteur,' and a major article in 1979 on his 'new maturity' made Mia Farrow, who then scarcely knew him, think of him as 'immensely appealing'. Arthur Gelb, the former managing editor, was responsible for the existence of the biography by Eric Lax, who is married to the daughter of the publisher of the New York Times. (Some idea of the book's critical sophistication may be gained from its comment that Allen 'is graceful, smart, and appreciated by women of great beauty, who sense the magnetism of his intelligence and the strength of his personality'.)

But the Times's cosseting of its pet New York Jewish mass-media comic intellectual is now in sharp conflict with the traditional sober, worthy, pro-family attitude of the Jewish-owned paper. This week it ran a piece headlined 'A Tarnished Idol?' in which New Yorkers expressed their 'worry' and 'dismay' over the story.

Mr Gelb now says, 'I know both of them and like them very much. Like all my friends, I'm baffled by the incredible charges and counter-charges. The last time I saw them, everything seemed fine. I wouldn't dare judge any of my artistic friends, or I wouldn't have any friends.'

The non-judgemental line is echoed by Tama Janowitz, the bright young author whose Slaves of New York was popular a few seasons back. 'This is not exactly new for men. I would hope they would rise above it, but people are human, and they do awful and terrible things all the time. It does seem disgusting, but he's a wonderful artist and, well, he didn't murder anybody.'

Another wonderful New York artist almost did that, and didn't lose the sympathy of the intellectuals. But times have changed since 1960, when Norman Mailer, in a flashy acte gratuit, stabbed his wife in the chest during a party. She nearly died, recovered, refused to press charges, and divorced him. 'When Norman stabbed Adele,' says Midge Decter, 'it was a time when we thought all things might be possible for all people, that sex and pot could open your mind. That doesn't exist anymore.'

Meanwhile, as the legal mills grind and the media mouths scold and pontificate, Allen must be wincing at the reverberations of some of the things he has written and said. The ending of his 1989 movie Crimes and Misdemeanours was changed, he explained to Eric Lax, because 'it's wrong for me to say, 'The future of the world is in little girls.' ' And there is the story he wrote not long before his affair with Mia Farrow began - about a man who falls in love with a woman and her daughter. Woody Allen called it Retribution.

Additional research: Lucy Richer

(Photograph omitted)