A schism developed in New York's troubled Republican Party on the eve of Tuesday's convention to nominate a challenger to Democratic Gov. Mario Cuomo.

Only last week did GOP leaders find a candidate in little-known economist Pierre Rinfret. Then on Monday, conservative Republican Herbert London handed the party a new problem by refusing to be Rinfret's running mate.Instead, the New York University professor said he hoped to run for governor as the candidate of the state's tiny but influential Conservative Party.

"I think this is a year for a crusade. This is a year to attack both the Republican and the Democratic parties," London said.

Normally, Republicans and Conservatives agree on a ticket. A split would make it easier for Cuomo to win his expected re-election bid for a third four-year term.

Michael Long, state chairman of the Conservative Party, welcomed London. "I'm tickled pink," he said. "This is not going to be a campaign, but a crusade for the middle class, the working taxpayer, to retake New York."

London's decision came one day before the start of the Republicans' three-day convention in this community north of New York City.

Cuomo is considered a potential 1992 presidential contender - if he's not upset in his bid for re-election. Democrats meet next week to nominate him.

The governor's advisers have taken delight in the Republicans' problems in finding someone to challenge Cuomo.

London admitted he has little chance of winning but said his candidacy is "a way of putting the Republican Party on notice."