The high cost of heroin is often pricing undercover police officers out of the illegal drug market and curtailing some investigations in the District, according to several law enforcement officials.

In some instances during recent drug investigations, the lack of funds has forced undercover agents to shut down investigations earlier than they would have liked and before they reached major drug dealers they had targeted, law enforcement sources said. In other instances, undercover police officers have had to turn down offers to make major drug purchases because they could not raise the cash, the sources said.

Police records reflect that few felony heroin drug charges were placed in the first three months here this year. But police officials were reluctant to attribute that occurrence to any lack of money.

The figures show that, at a time of an alleged serious increase in durg tratficking in the District, only 48 of the 1,630 drug charges placed by police were for felony heroin charges. There were an additional 144 charges against defendants for misdemeanor heroin possession, bringing the total number of heroin charges to 192.

In contrast, the police placed 737 charges -- or nearly half of the 1,630 total charges -- against defendents for marijuana possession, supposedly the lowest priority of drug offense here.

The problem of getting enough money together to make substantial undercover drug purchases has become more acute recently because of a tremendous increase in the whole-sale cost of heroin, law enforcement officials said.

The cost of one ounce of heroin of the purity usually available for purchase in major undercover drug investigations now is about $12,000. As recently as four years ago, the price was about $1,400 for the same amount and the same purity, narcotics investigators said.

The amount of money available for undercover drug purchases is a closely kept secret within law enforcement agencies. However, persons familiar with the D.C. funding process said the yearly amount earmarked for undercover narcotics work here has stayed fairly constant while the price of heroin has skyrocketed.

Even with the financial limitations under which they are operating, drug investigators said they are able to continue to focus a minimal number of major, long-range investigations on suspected top-level drug wholesalers as well as make occasional arrests of blatant street-corner drug sellers.

The problem arises in investigations of the middle of the vast underworld drug market here -- the suspected scores of drug "retailers" who handle large quantities of heroin but who are too small to be targeted for year-long investigations and too large and wily to be caught by simple street-corner observation, investigators said.

The shortage of cash for undercover drug purchases had been noticed by the Washington underworld, according to several law enforcement officers.

"The word seems to be filtering back to major drug dealers" that undercover police officers cannot come up with large amounts of cash to make major drug purchases, according to U.S. Attorney Charles F. C. Ruff.

As a result, lae enforcement officials said there have been occasions when drug dealers have offered to sell large quantities of heroin to undercover agents in an attempt to discover whether they were police officers.

"A few years ago, if someone wanted to buy a quarter-kilo of heroin, the suspect would figure the buyer, was a cop because only cops had that much money. Now, it's the other way around. The suspect will offer to sell more dope, and if the buyer turns it down too quickly, they'll figure he's a cop and can't come up with the cash," said one prosecutor who has worked on drug cases for the past several years.

The financial problem comes at a time when Ruff is setting up a new narcotics prosecution unit within the U.S. attorney's office here in order to deal with the city's continuing drug problems. Ruff said his intention in setting up the unit "is central control over handling of narcotics cases and making of enforcement policy."

Among the major ways that narcotics cases are brought into the criminal justice system here are: routine arrests by uniformed police officers observing narcotics activity or making arrests for other crimes and finding drugs; investigations by the special 45-person narcotics squad that works out of D.C. police headquarters, and a special, area-wide U.S. Drug Enforcement Administration-Metropoliitan Police Department task force that conducts long narcotics investigations of a handful of the perceived top drug dealers here.

The various investigators now funnel their charges into various offices of the U.S. attorney's office here for processing and filing either in federal or local court. The new unit, to be headed by veteran federal prosecutor E. Lawrance Barcella Jr., will take over the screening process for all drug cases in the future.

Ruff said law enforcement officials are "always torn between the necessity to patrol the street traffic or cutting off the supply" and that the two have to be balanced by recognizing the need to divide resources.

Police and federal drug officials said they have never aborted an investigation of a top-level drug dealer because of a fund shortage. They said that the task force was able to get together $1 million in cash to "flash" as front money in a drug purchase here last winter.

However, persons involved with that case said the investigators had to settle for $1 million instead of the $5 million the seller had requested. The seller did not catch the error because he got tired of counting the relatively small bills and ultimately took the undercover agent's word that $5 million was actually there.

"That money had to be rounded up from all over the country, though," one drug investigator said.

A police department narcotics detective also said it was not difficult to get small cash amounts -- up to $100 or $150 -- to make street-corner drug purchases.

Police Inspector Charles Light, whose morals division includes the narcotics squad, said the street-corner purchases are necessary because "the heroin problem cannot be controlled" by locking up only top-level drug dealers. h

Drug arrest statistics kept by Light's unit reflect some of the problems in making substantial drug cases here. In the first three months of this year, the actual number of drug charges placed by the police was up 1,630 as compared to 1,201 for the same period last year:

Of the 1,630 cases, only 48 were serious felonies for distribution or possession of heroin.

In comparison, the police lodged 737 charges against criminal defendants for possession of marijuana. Police officials said that most of these marijuana charges resulted from the drug being found on persons being arrested on other charges, and does not reflect an attempt to focus resources on marijuana charges.

The rest of the drug charges dealt with arrests for possession of other drugs, such as Preludin and Dilaudid, prescription drugs that are used illegally by heroin addicts to boost the "high" caused by heroin.

The police statistics do not represent the number of individuals charged with drug possession, but rather the total number of drug charges placed.