WORD travels quickly around the sparse exercise yard at Lad Yow prison, where time long ago lost its meaning for the several hundred foreign inmates who followed the dragon's trail - and lost. ''Nobody could believe it at first. When we found out it was true there was a lot of trouble, and they were talking about bringing male warders in to keep order,'' one female prisoner told welfare officers. News had slipped out that two British women were to be set free after serving only three years on drug charges in one of the most notorious prisons in Asia, where some have spent more than a decade looking for a glimmer of hope in Thailand's tedious court appeals system. Patricia Cahill and Karyn Smith were pardoned by King Bhumibol after direct intervention by the British Prime Minister, John Major, and his Thai equivalent, Chuan Leekpai. The women went home to a hero's welcome and a possible Hollywood film offer, leaving several hundred other British passport-holders, some Hongkong citizens, wondering what they had to do to get out. ''They're not happy, they don't think it's fair. They were angry, and the Thai prisoners as well. They didn't really understand why they were released,'' said a volunteer who visited the prison just after the pardon was announced. The women were officially freed on humanitarian grounds, despite being caught with 30.6 kilograms of heroin at Bangkok airport - a record amount for an individual seizure. British officials did not spell out why it was thought they had ''suffered enough'' from their ordeal, but there was speculation in diplomatic circles that the move was aimed at defusing intense media attention on their case. This was a case which refused to die. Two respected British newspapers, The Independent and The Guardian, have alleged in recent months that the women were framed, with Thai police supposedly planting the drugs to claim a substantial reward. The story reached farcical levels in May, when a British journalist confronted Prime Minister Chuan over the case at a dinner for local correspondents. The startled Thai leader promised to ''look into'' it. Then followed a public slanging match waged through the pages of the bemused Thai papers between a London lawyer handling television contracts on behalf of Smith, and the British journalists. Unlike the frenzied British coverage, the women's imprisonment attracted little attention in Thailand, where there were 100,000 drugs-related arrests last year. About 990 of the 1,200 foreigners in local jails face trafficking charges, and there are conservatively estimated to be 400,000 Thai addicts. However, Thai officials were unhappy that the British case was attracting unfavourable publicity to a country that is considered one of the more tolerant in its treatment of heroin smugglers. While Malaysia and Singapore routinely execute convicted traffickers, Thailand has not carried out a death sentence on foreigners for decades and last shot a Thai national for drug offences five years ago. Conditions inside the two main prisons used for foreigners are basic, but not oppressive. Regular visitors say inmates are allowed out of their cells 12 hours a day, and are treated fairly provided they abide by regulations. ''The most common complaint from the women is that they get too fat from all the inactivity. They are bored, but they're not ill-treated,'' said a prisons volunteer. There are currently 200 prisoners on death row, and 70 have lost the last avenues of appeal. Clemency pleas are automatically entered on their behalf, and all go to King Bhumibol. ''Since 1988, no petitions for clemency have been returned from the palace. This could mean his Majesty the King may not wish to see people executed again,'' Corrections Department director Kamol Pachuabmoh said recently. Smith and Cahill were arrested on the night of July 18, 1990, as they were about to board a flight to Amsterdam. Customs officials found the heroin in their suitcases hidden among shampoo bottles and snack tins. British police had tipped off their Thai counterparts after discovering that the women, then aged only 19 and 17, had been given money for their tickets by a Gambian businessman and were following a known drug trafficking pattern. The arrests came only months after the British screening of Bangkok Hilton, a sensationalised Australian TV drama on the fictional ordeal faced by drug smugglers in Thailand's prisons system; tabloid newspapers seized upon the case with gusto. ''This story has got everything: two young, attractive women facing execution from sadistic guards in the world's biggest drugs region. What more do you want?'' one Fleet Street foreign editor said at the time. Neither woman got death, though their sentences were harsh. Smith was to serve 25 years and Cahill, then a juvenile, got 18 years and nine months. Cahill and Smith were told by their lawyers from the start that the worst they faced was a long sentence. Britain was already negotiating an exchange treaty under which its nationals could eventually serve their time at British prisons. The two women would have been eligible next year, after completing the mandatory four-year waiting period. Instead, they opted for the remote possibility of a royal clemency, which can be sought for foreign prisoners - though it is rarely granted - afterthree years. There was a precedence for this. In 1980, British nurse Rita Nightingale was pardoned after serving three years for drug offences, in a case that aroused similar strong emotions. The lawyers for Smith and Cahill filed for a pardon late last year to prepare for the amnesty list normally released at royal birthdays and Buddhist holidays. The appeal was supported with a letter from Mr Major in February. In the following six months, Mr Chuan's government faced a spate of poor media coverage overseas, ranging from a derogatory dictionary reference to Thailand's inclusion in a list of the top 10 ''most dangerous destinations'' to visit. ''I think the image problems all became too much. There was a temptation to remove at least one of the sources of the bad press, and in that respect, Major's appeal was a godsend,'' said a Western diplomat who has followed the case. The treatment of Smith and Cahill is in sharp contrast to the fate suffered by the several hundred Nigerian traffickers picked up on the same smuggling route as the British girls. They have no embassy in Thailand and depend upon handouts for food, as prisoners are expected to provide for themselves from outside sources. There are nine Hongkong Chinese female prisoners on drug charges. Among the Asians being held is a woman arrested five years ago because her boyfriend was carrying heroin in his luggage; she was 17, the same age as Cahill. ''Prisoners, particularly those who have served longer than Cahill and Smith for smuggling much smaller amounts of heroin, are wondering why they were not also considered for a pardon,'' noted Thailand's The Nation newspaper. '' . . . would Major have done the same thing if Prime Minister Chuan Leekpai had interceded on behalf of Thai citizens who had committed a serious crime in the United Kingdom?''