Last Sunday's story by Don Oberdorfer and Charles Babcock {"The NSC Cabal: How Arrogance and Secrecy Brought On a Scandal," Outlook} dealt with the performance of the National Security Council staff while I served as national security adviser. The article was false in many places and contradictory in others. Its theme was that under my stewardship the staff operated in unjustifiable secrecy and that my purpose was to circumvent the Department of State. That is not only false but, as a practical matter, impossible.

Early in 1982 the president established an inter-agency process that deliberately put State Department officers (at the assistant secretary level) in the chair for planning and executing every regional and functional policy of the administration. Together with Ambassador-at-Large Richard T. Kennedy, I wrote the directive. It is fair to say, however, that the State Department never exercised the responsibility for managing the process that was vested in it.

In fact, it was as a consequence of virtual paralysis in the development of arms control policy in 1983 that that subject was moved to the White House. I would urge the authors to ask throughout the government to see whether there are any complaints on the functioning of the arms control process during that period. It is quite true that this required countless meetings; that is the nature of government.

That was the case regarding arms control from the summer of '83 until December '85, a time in which the United States successfully brought the Soviet Union back to the negotiating table, arranged a summit at Geneva and emerged with agreement to work for a 50 percent reduction in strategic systems.

Along the way, the NSC also presided over the successful management of the Grenada operation, the release of the hostages aboard TWA 847 and the recovery of the Achille Lauro. These events were expressive of NSC management in the only two areas over which they were assigned responsibility -- arms control and crisis management. In the other areas -- policies for Europe, Africa, Latin America, etc. -- the State Department was in charge.

Concerning the Iran initiative, the early analysis was fully shared with the secretary of state, who chose to ask that the national security adviser handle it. After doing so for about the first four months, I believed that there was little promise in it and recommended that it be terminated.

There are countless other errors in the story. For example:

The suggestion that while at the State Department in 1981 I traveled on secret missions in which I circumvented the career bureaucracy is false. Before every trip I took for Secretary Haig, I invited input from experts in the Middle East bureau and debriefed the bureau chief on my return. While traveling I relied entirely on the local ambassador and his staff. This is hardly indicative of the lust for power and clandestine operations suggested in the story.

The notion that while at the Department Howard Teicher, Michael Ledeen and Donald Fortier constituted a group that "could come up with 10 ideas for every one that was given a serious hearing" is simply false. No such group ever existed either formally or informally.

Neither did any such group exist at the NSC, as the story asserts.

At no point while I served at the White House was Mr. Teicher involved in the Iran mission. To the best of my knowledge, at no time did Adm. John Poindexter involve Mr. Ledeen.

Finally, the lead paragraph of the story is almost too mean-spirited and false to warrant comment. It suggests that my faulty advice from Lebanon led to the death of 241 Marines. The truth is this: I provided my assessment of the danger to Americans at the request of the president, the secretary of state and Judge Clark in Washington. I did so making clear that to use force, even in self-defense, would alter our role in the conflict. If Ambassador Dillon had an opposing view, he had every right and responsibility to record it.

The president, with the strong support of the secretary of state, approved the use of naval gunfire. One of his jobs is to protect Americans overseas if the resident government cannot do so. Within two weeks, a cease-fire had been achieved, and I was called home.

Later the Marines were bombed, I believe, as a consequence of the failure in Washington to forge for them a sensible mission statement or to give them the authority to defend themselves properly. After being back in the United States for three months and seeing how bad the confrontation between the secretaries of state and defense had become, it was clear that it would be impossible to forge any semblance of a coherent politico-military policy in Lebanon. As a consequence I recommended that the Marines be withdrawn. ROBERT C. McFARLANE Bethesda