The Reagan administration's top antitrust official yesterday defended his discussions with the Defense Department in preparing the government's antitrust case against the American Telephone & Telegraph Co.

William F. Baxter, the assistant attorney general in charge of the antitrust division of the Justice Department, said in testimony before a House subcommittee that whenever his division is seeking to restructure entire industries through antitrust litigation, it is appropriate for him to talk with other government experts about the effect of such lawsuits.

The Justice Department is in court in an effort to break up American Telephone & Telegraph Co. into several smaller companies.

Rep. Glenn English, D-Okla., chairman of the House subcommittee on government information and individual rights, criticized the discussions, saying it made him "worried about the credibility and independence of the Justice Department."

Baxter quickly responded, saying "I have no doubts myself." When it comes to imposing fines and seeking criminal sentences, "it seems to me that the Department of Justice has and should have an almost complete independence from the other branches of government," he said.

However, he added, "whenever the Department of Justice seeks to achieve major structural changes in major industries . . . as it is doing in the AT&T litigation, it has a responsibility to make sure that such major industrial surgery is well-informed.

"There would be occasions in which various branches of government would be a repository of expert knowledge that we were not privy to. . . . It is only appropriate that we go at least to hear the views of those agencies of government which have had the expertise when we propose to undertake such critical industrial surgery."

Discussions between Justice and Defense began last May after Defense publicly criticized the 7-year-old case. Defense, along with the Department of Commerce, called for the case to be dismissed, arguing that if it succeeded it would harm the telecommunications network the nation needs in times of national emergencies and war.

Baxter subsequently agreed to discuss these concerns with Defense officials. Shortly after these talks began, Baxter indicated he would be willing to drop the antitrust suit, whose trial is more than halfway completed, so long as Congress enacted what he regarded as adequate legislation to restructure AT&T.

The legislation, which requires AT&T to set up separate subsidiaries for all of its competitive business lines, is less drastic than the complete Bell System break-up Justice is seeking in court.

Baxter once again defended his decision to abandon the suit if the legislation was passed, arguing that it may achieve the same goal as the court suit--greater competiton in the telecommunications industry.