Lt. Col. Oliver North has done the country a service with his testimony on the Iran-contra affair. By being the unapologetic, combative witness he has been, he has brought into focus the real issue in this controversy.

That issue is not primarily Ronald Reagan's veracity or complicity in this business. The president long since has acknowledged that he gave personal approval to the arms shipments to Iran. It is equally clear, not just from North's testimony but from the whole record, that the National Security Council operatives had -- as North said -- every reason to ''assume'' the president also approved their use of the profits to aid the contras in Nicaragua.

It would be convenient if North had not shredded the documents on which Reagan was asked several times to indicate his approval of the transaction. But it is hardly vital to know whether Reagan's approval was explicit or implicit.

The president has defended as proper the solicitation of funds for the contras from private individuals in this country and from several foreign governments. Having approved the sale of arms to Iran, there is no reason to believe he would have been offended by adding the Iranians to the list of contra contributors -- what North still calls ''a neat idea.''

The late William Casey, Reagan's close friend, campaign manager and choice as director of the Central Intelligence Agency, clearly knew about the deal. So did John Poindexter, Reagan's national security adviser, and his predecessor, Robert McFarlane.

If the president was -- as he asserts -- unaware of the diversion, it is as clear as anything can be that he could have learned of it simply by asking a question of officials close at hand. Under our system of government, his responsibility for this transaction and for his own acts of commission or omission is crystal clear. No theory of accountability permits any other conclusion but that these officials were acting with the authority and on behalf of the president of the United States.

The American public has grasped this point, and the opinion polls measure the resultant damage to Reagan's credibility.

North's testimony was not crucial to establish any of these points. What he has helped the public understand is the exact nature of covert actions such as this and the dilemma they pose for a democratic society such as ours.

North says -- and almost everyone would agree -- that in a dangerous world, the United States must have the capacity to conduct covert actions in the interest of our national security.

Bluntly, he said, ''By their very nature, covert operations or special activities are a lie.'' At the very least, they involve steps to ensure ''plausible deniability'' for the United States government and its agents should anything go awry and the operation be exposed. In addition to concealment, covert actions often involve deception of the other side.

The dilemma arises from the fact that such concealment and deception necessarily extend to the American public. As North said, we cannot put a bubble over our country and discuss these matters among ourselves. Yet if this is to be a government of law, covert actions as well as overt policies must reflect the will of the people.

A procedure exists for resolving this genuine dilemma. It is the requirement that the executive branch give timely notice to the intelligence committees of Congress of the covert operations it is conducting or contemplating.

When North was asked, however, whether he wanted Congress informed through its designated committees of what he and his associates were doing, he said, ''I didn't want to show Congress a single word on this whole thing.'' When he was summoned by the House intelligence committee, the responses he gave, he said yesterday, were "erroneous, misleading, evasive and false." That general policy of defiance has been endorsed by Attorney General Edwin Meese III and by the president himself. They assert that the president may delay notification for weeks or even months at his discretion.

That is a position that cannot be allowed to prevail if this is to remain a democratic society in more than name.

There is a prudential case to be made for the timely notice policy. Members of the intelligence committees, led by experienced senators and representatives who are well trusted by their colleagues, offer any president a source of good counsel. It is hard to imagine these sensible politicians sensitive to public opinion would not have attempted to warn the president away from the folly of selling arms to Iran.

But the prudential case is less compelling than the constitutional argument for timely notice. The president might have ignored the legislators' advice or their certain warning against using any of the proceeds to support the contras. But if the notification requirement had been enforced, no subordinate could have risked even a remote possibility that the president himself was uninformed on the transaction.

The responsibility for the decision would clearly have lodged, as it must, with the man the American people had elected, not with a Marine Corps lieutenant colonel.