Extraordinary fossil discoveries deep in a Chinese phosphate mine have opened a new path toward solving a scientific mystery that has long shrouded the origins of complex life on Earth.

American and Chinese research teams are reporting this week that they have unearthed the first fossil remains of microscopic animal embryos and the larvae of primitive sponges that thrived tens of millions of years before the moment in geologic time when the ancestors of virtually every modern life form, including human, burst abruptly onto the world scene.

That flash of evolution 540 million years ago -- the ``Cambrian explosion'' when family after family of many-celled creatures with hard shells or spinal cords and skeletons blazed their stony marks in the fossil record -- has puzzled scientists for generations.

But whatever came before the Cambrian explosion has been an even bigger mystery, puzzling scientists as far back as Darwin.

One-celled organisms akin to algae and bacteria are known to have emerged from some kind of primordial ooze as long ago as 3.8 billion years ago -- a billion years, perhaps, after the newly formed Earth cooled and the seas emerged.

But then came billions of years before a few intriguing pencil-thin tracks were left in ancient solidified mud to indicate that some animals might have been crawling around even before the Cambrian. Those creatures might have been ``squishy little larva-like things,'' as one of the Chinese researchers describes them.

Now, in reports appearing today in the British journal Nature, and tomorrow in the American journal Science, researchers from China, Taiwan and America are reporting the first clear evidence that multicelled animals did in fact live long before the Cambrian explosion -- perhaps as far back as 580 million years ago.

The beautifully preserved fossils were found in a phosphate mine near a town called Weng 'an in south-central China's Guizhou province, where the mineral calcium phosphate apparently replaced the jellylike bodies of the primitive embryos and sponges and left them buried in the mine for paleontologists to find.

``These fossils are just spectacular,'' said geologist James Valentine of the University of California at Berkeley's Museum of Paleontology, an expert on the ecology of the Cambrian period. ``And any time you can find fossils of embryos, it has to be fantastic because you know that something must have lived before those embryos. And now we have the possibility of finding more larvae and perhaps even the body plans of the earliest animals.''

The embryo fossils, Valentine said, appear to belong to a kind of worm, although that is far from certain. But what is clear is that these are fossils from organisms that had no bones or shells; they may also have been the embryonic cells of sponges, or the earliest forebears of today's jellyfish, sea anemones or complex worms.

They may, in fact, resemble hypothetical creatures with mouths and little else that scientists proposed a year ago in an effort to imagine what pre-Cambrian life might have been like.

The fossils in the Chinese mine that both research teams were able to analyze in such unprecedented detail are extremely tiny -- the largest a clump of cells thinner than the width a pin. But according to one team, they include many embryos in various stages of development, and possibly even the fertilized egg of a microscopic organism. Later analysis may determine just what the fully developed animals might have looked like.

Many of the exquisitely detailed fossils were found by the team that included Andrew H. Knoll of Harvard, a specialist in pre-Cambrian life, who worked with Shi Xiao and Yun Zhang of Beijing University in China. The other group included a research partnership between China and Taiwan: Chia-Wei Li and Jun-Yuan Chen of Taiwan's National Tsing- Hua University and Tzu-En of Nanjing's Institute of Geology and Paleontology in China.

``We have no idea whether we are seeing most of the life cycle of a truly microscopic animal, or simply the early embryology of something that developed into something much larger,'' Knoll said of the puzzles that remain to both teams and to paleontologists throughout the world.

1998 San Francisco Chronicle Page A1