Matala, Crete (AP)

THE HIPPIES who flocked to this Mediterranean island paradise from all parts of the world in recent years gradually are leaving for new digs - and Matalans are feeling it in the pocketbook.

Many local businessmen will be sorry to see the last of the flower children leave the caves they occupy in Matala on the southern coast of Crete.

Although the bearded, beaded and otherwise colorful cave dwellers - who numbered about 200 when the hippie settlement was at its height - were never really big spenders, they did provide a sizable chunk of income for tavern and grocery owners.

We are heading for difficult times now that our foreign friends are departing, a Matalan grocery owner said. Fifteen families were dependent on the hippies for their support. Now, Ill take my family to Mires (the next largest town in the area) for the winter.

Police Harassment
The hippies, who come from the United States, Canada, Ireland, Finland and other countries, say police harassment is forcing them out of the caves, which are ancient Roman burial grounds.

Some say the harassment was triggered by unfavorable publicity in the Greek press. Others blame a local narrow-minded priest and some say the termination of their rent-free existence is a result of an archeological service declaration that the caves have historical value.

Only about 40 hippies still occupy the caves, situated in the side of a limestone cliff that overlooks a picturesque beach dotted with several taverns.

About 10 hippies have moved into other caves in the area and are hopeful the police will not bother them.

The members of the hippie colony live on bread, cheese and other staples, and many eagerly await the weekly mail in the hope families or friends will send them money.

And when the hippies go, so will their limited funds, vital to the economy of the Matalans.

Perhaps the flower children brought even more than money to the people of Matala.

Strangely enough, the hippies brought us progress and fame, whether we wanted it or not, tavern owner Stelios Axhoarakis said. Matalans feel they are good, kind people and our relations with them have always been excellent. We hate to see them forced out. We hope they will find the peace they seek.