``M. Butterfly'' was chosen best play and ``Into the Woods'' was picked as best musical of the 1987-88 New York theater season by the Drama Desk, it was announced Tuesday. ``The Phantom of Opera,'' which lost the top musical prize, won the most awards _ seven. It picked up awards for actor in a musical, Michael Crawford; director of a musical, Harold Prince; music, Andrew Lloyd Webber; orchestrations, Andrew Lloyd Webber and David Cullen; set design, Maria Bjornson; costume design, Maria Bjornson; and lighting design, Andrew Bridge. Ron Silver was named best actor for his performance as a greedy Hollywood mogul in David Mamet's ``Speed-the-Plow,'' while Stockard Channing was chosen best actress for her portrait of a woman slowly going mad in Alan Ayckbourn's ``Woman in Mind.'' ``M. Butterfly,'' written by David Henry Hwang, tells the bizarre story of a French diplomat who has an affair with a transvestite Chinese opera singer. The play also won awards for its director, John Dexter, and for featured actor, B.D. Wong, who plays the opera star. ``Into the Woods,'' an adult fairy tale musical, captured five prizes. Besides best musical, it won for featured actor in a musical, Robert Westenberg; featured actress in a musical, Joanna Gleason; lyrics, Stephen Sondheim, and book of musical, James Lapine. Patti LuPone was named best actress in a musical for her raucous portrayal of Reno Sweeney in Cole Porter's ``Anything Goes.'' The show also won the best revival award as well as a prize for choreography, which went to Michael Smuin. The prize for featured actress in a play went to Christine Estabrook who played a retarded woman in ``The Boys Next Door,'' while an ensemble acting award was given the cast of the off-Broadway musical ``Oil City Symphony.'' Special Drama Desk awards were also announced for Michael Feinstein; Actors Equity Association, the Theater on Film and Tape Collection at Lincoln Center and the Yale Repertory Theater. The Drama Desk, which was started in 1949, is an association of New York drama critics, editors and reporters.