House Speaker Thomas P. (Tip) O'Neill said yesterday he favors retaining Rep. Robert L. F. Sikes (D-Fla.) as chairman of the House Approriation subcommittee on military construction.

A move to oust Sikes as subcommittee chairman has developed because last year the House voted, 381 to 3 to reprimand him for violating ethical standards by using his position for personal gain. The House ethics committee said Sikes, among other violations, caused a commercial bank to be situated on the Pensacola Naval Air Station in his district, then bought considerable stock in the bank.

O'Neill, who is pushing a stronger code of ethics for the House, said "Sikes has been dealt with by Congress. His punishment was severe when he was censured. The people saw fit to send him back by an overwhelming vote.

O'Neill said he would listen to the arguments when Sikes' chairmanship is debated in the caucus of all House Democrats next week, but unless something new is presented. "I will vote for Sikes to retain his chairmanship."

Rep. Matthew F. McHugh (D-N.Y.), who by yesterday had 25 signatures on a letter to his Democratic colleagues urging Sikes' ouster, said. "I have great regard for the Speaker, but disagree with him on this and I am disappointed in his position.

while all in favor of a stronger case of ethics and I'm sure Tip O'Neill is serious in proposing it. He's going to be an excellent Speaker.

"But people won't believe we're serious if Sikes, who was reprimanded in part for actions he took as chairman, is retained. People are looking at this vote as symbolic and rightly so."

McHugh's letter is in addition to are signed by 13 House Democrats last week that also called for Sikes' [WORD ILLEGIBLE]

[WORDS ILLEGIBLE] Democratic caucus. [WORDS ILLEGIBLE] the Appropriations Committee, which sets funding levels for the government's department and agencies, the subcommittee chairman also are required to stand for caucus election.

The caucus will meet today to elect committee Chairman and members of standing committees. While there is some opposition to Rep. Clement Zablocki (D-Wis.) to be chairman of the International Relations Committee and Rep. Robert Nix (D-Pa.) to be chairman of the Post Office and Civil Service Committee, neither is expected to be defeated.

Two years ago, the 75-member post-Watergate class of freshmen helped oust three powerful chairmen, but there is less interest in changing the status quo this year, partly because members want to give the new House leadership and the new Democratic administration a chance.