A nonseparable method for time-dependent quantum simulations of large polyatomic systems is presented and applied to the dynamics of the I2Ar17 cluster, following electronic excitation of the iodine molecule. The new method is an extension of the classical separable potential (CSP) approximation, in which the evolution of each mode is governed by a time-dependent mean potential due to the other modes and the total wave packet is a product of single mode wave functions. The computational effectiveness of the CSP approach stems from the use of classical molecular dynamics (MD) trajectories, carried out at the outset oi the procedure, for obtaining the effective single-mode potentials. The present method generalizes the CSP scheme by a configuration interaction (CI) treatment, in which the total wave packet is represented as a linear combination of separable terms? with coefficients determined from the time-dependent Schrodinger equation. The single mode wave functions for each configuration are propagated along effective potentials that are generated using individual classical trajectories. The classical;MD simulation is also used for simplifying the dynamical equations for the CI coefficients. Thus. the selection of correlations that are included quantum mechanically is guided by classical mechanics, which is the basis for the computational efficiency of this approach. The CI wave packet for the I2Ar17 system with 51 vibrational degrees of freedom was propagated for 500 fs following I-2 (B<--X) excitation. About 1500 configurations proved sufficient for convergence of the CI series. The separable approximation to the wave function holds for 60 fs and begins to break down upon the first collision of the iodine atoms with argons. After the second iodine-argon collision this breakdown is almost complete, and at t = 500 fs the CSP term represents less than 5% of the correlated wave packet. Both absorption and resonance Raman spectra are, however, well described by the separable CSP method, since they are determined within the first 60 fs. The CI-CSP method offers very good accuracy due to inclusion of important correlation effects between different modes, while remaining computationally feasible for systems up to 100 degrees of freedom and more. (C) 1997 American Institute of Physics.