Bidding by New York publishers for the autobiography of House Speaker Thomas P. (Tip) O'Neill had reached more than $1 million by late yesterday, according to sources close to O'Neill. Negotiations were expected to continue into the night, with the final selection of a publisher to be made by O'Neill in the next day or two.

One New York publishing source described the intense competition for the O'Neill book, about which some publishers have expressed reservations, as the latest manifestation of the publishing world's "feeding frenzy" for books by Washington's better known public servants.

O'Neill, 72, will retire at the end of next year after 34 years in Congress. This spring, former U.N. ambassador Jeane J. Kirkpatrick signed a $900,000 contract with Simon and Schuster for a book about her four years at the United Nations. Late last year, former vice presidential candidate Geraldine Ferraro signed a contract for a reported $1 million with Bantam Books for an account of the 1984 presidential campaign.

"If you're a Washingtonian with some years in government, the price goes up. It's crazy," said one book agent.

By yesterday evening three publishing houses -- Simon and Schuster, Random House and Houghton Mifflin -- were still active bidders in an intense telephone auction that began early Thursday. At least 10 publishers submitted opening bids, according to sources close to the auction.

Several publishers dropped out quickly, however, reportedly unconvinced that the memoirs were worth their rapidly escalating price and worried that O'Neill has made no firm commitment to spill the beans about political insiders and secrets in his long career.

Ferraro and Kirkpatrick both met personally with publishers before their contracts were signed.

"I just spoke to the heads of two houses," said one publishing source who asked not to be named, "and people are very concerned about whether he's going to be frank. In most auctions you ask that up front. It seems naive, frankly, to think that he will say something, because they haven't met with him and asked him the hard question. Will he talk? If he doesn't, it isn't worth the $1 million figure."

Bids for the O'Neill book have been made on the basis of an eight-page outline written by William Novak, the writer who helped Chrysler Corp. Chairman Lee A. Iacocca with his bestselling autobiography. Novak is under contract to do the same for O'Neill and will travel to Cape Cod in August to begin interviews.

O'Neill's book agent, Jay Acton, yesterday dismissed critics' reservations about the book as misguided, and attributed the advance sniping to "people who didn't want to get in, who didn't have the money to get in."

"He's going to write a very candid book," Acton said. "He's promised what's in the proposal, to write his memoirs."