Treasury Secretary Michael Blumenthal, Federal Reserve Board Chairman Arthur Burns and Finance ministers from four key Western nations met in secret near Paris yesterday to decide how to avert a feared drop in the value of the dollar and French franc, diplomatic sources said.

Blumenthal and his counterparts from France, Britain, West Germany and Japan conferred in the heavily guarded La Lanterne lodge on the ground of the historic Palace of Versails, the sources said.

Only official cars were allowed near the lodge, where the finance ministers of the so-called Group of FIve have already met twice in the past year.

The French franc has lost 4 percent of its value in three weeks as a result of uncertainty over a possible Communist-Socialist victory in the March 12-19 national elections.

With the leftists accusing the government of allowing the franc to drop by mismanaging the economy, latest public opinion polls indicate they stand a good chance of winning the elections.

Diplomatic sources said the conference also would deal with the persistent U.S. determination to prompt West Germany and Japan to boost their economic growth.

Washington says that a rapid expansion of economic activity in the two "locomotives" of the Western economic world would pull along weaker members such as Italy, Britain and France.

It was believed the conference would also consider recent U.S. efforts to shore up the dollar against strong foreign currencies through a multibillion dollar swap agreement with West Germany, and prospects for narrowing the U.S. foreign trade deficit.

Other agenda topics were said to include a review of monetary and fiscal policies of major nations and future strategy for official intervention in world money markets.

The Versailles meeting also was expected to take up a joint strategy by the Group of Five at next week's meeting of central bankers at Basel, Switzerland, which will deal with the balance of payments problems of the leading Western currencies.

Blumenthal flew into Paris Saturday night and is scheduled to fly this morning to Bonn for talks with West German Chancellor Helmut Schmidt, apparently to urge him again to stimulate his country's economic growth.

Bonn so far has rejected all U.S. pressures for such moves, chiefly on the ground that they would increase West Germany's inflation rate.

Burns was to go to Basel for what may be his last meeting of central bankers. He is to leave the Federal Reserve Board as soon as G. William Miller, President Carter's choice as Burns' successor as chairman, is confirmed by the Senate.That is expected late this month or in March.