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While the latest children's fantasy books don't wield any especially powerful magic, there are always a few that are well worth their price - what we used to call "keepers." Choosing books for children is a gamble, of course, for a book finally is a personal thing; we cannot always explain why we are fond of one and not another. Still, they can be a compliment to the recipient and as good a message of love as any I know.

The best method is to pick a book that you know you would have liked when you were a child. I was delighted by "Melisande," (Harcourt Brace Jovanovich; $13.95), a story written almost a century ago by the durable British children's author, E. Nesbit, with brand new illustrations by British artist P.J. Lynch.From the tale's beginning - a princess is cursed with baldness at her christening by the requisite bad fairy - you know this will be an amusing story, distinguished by Nesbit's tongue-in-cheek adherence to fairy-tale conventions. After a bald childhood, Melisande finally is given a leftover wish of her father's. She asks for hair that will grow an inch a day, and twice as fast each time it's cut.

Disaster! In no time at all she is going to bed with her hair cut short and waking up with a mile of it clogging her bedroom. The confusion and problems all are cleared away by a wise prince, but he isn't so wise that he doesn't make a few mistakes, for which you only like him better.

Not a typical picture book - its text is too long and its language and concepts too sophisticated for the littlest children - "Melisande" is best left in the hands of middle-range readers, those from 6 to 10. Nevertheless, there are illustrations on every spread but one, and they are truly wonderful. Comparisons may be odious, but I will use one anyway: If you could combine the work of Arthur Rackham and Trina Schart Hyman, you might have an artist like P.J. Lynch. From the smallest spot to the largest double-spread, his watercolors are clear, witty and bright and his draftsmanship faultless - each face and figure unique, every detail given careful attention. The pages showing Melisande grown to giant size - never mind how; read the book - are by themselves enough to make a keeper.

Another keeper is Ute Krause's "Nora and the Great Bear" (Dial Books; $11.95). I didn't think so at first, for the pictures are thin, colored cartoons difficult to appreciate without the text. The story is quickly told: Nora, a modern little girl, goes out into the snowy forest with the village hunters to search for the Great Bear. They all carry weapons, but don't let that put you off; this is more a pilgrimage than a hunting expedition.

No bear is found, so Nora, frustrated, goes off to look on her own without her weapons, wandering so deep into the forest that she loses her way. Night falls and she is beginning to despair when the Great Bear appears, huge and silent in the moonlight, and leads her back to camp, whereupon he disappears, leaving no tracks.

The story is special because of what it has to tell about the elusive realities of nature and because of Krause's subtle style. Once understood, the story gives her simple pictures a deeper meaning. Though neither beautiful nor skillful, they convey the lonely cold of the forest and avoid trivializing the bear, even though he is only a cartoon. Perhaps a more gifted illustrator would have gone too far and spoiled the magic. At any rate, I found the two halves, words and pictures, nicely wedded at last.