A three-judge federal Appeals Court Panel here yesterday unequivocally endorsed mass arrests and other controversial procedures used by the Metropolitan Police Department to quell major protests in Washington over the past decade.

The ruling reversed an earlier finding by U.S. District Judge Joseph C. Waddy, who had found that the police had illegally used clubs, tear gas, stampede tactics and violated the civil rights of participants in those demonstrations.

The Appeals Court judges, in an opinion written by U.S. Circuit Judge Roger Robb, said the police department did only what was necessary to keep the streets clear of demonstrators. Any police misconduct was minimal and isolated and did not warrant the general judicial disapproval it received from the lower court judge, the Appeals Court added.

The sweeping Appeals Court decision upheld the city's "police line ordinance" that allows officers to designate a location as being off limits and arrest those within it. The Court further held that persons who were not otherwise breaking the law could be arrested merely for "failing to move on," after police set up a police line.

Bystanders who remain near a protest after such a line has been established run a risk of being caught up in any subsequent police sweep, the Court acknowledged. It added, however, that "confronted with a mob, the police cannot be expected to single out individuals; they may deal with the crowd as a unit."

In addition, police who make arrests at demonstrations are not required to inform a person of the charges on which they are being arrested and are not required to advise that arrested person of his "rights" upon arrest, the Court added.

The appellate ruling also set aside an order by Judge Waddy directing the police department to draw up a policy manual to handle future demonstrations, saying the order was an unacceptable court intrusion into internal police matters.

The ruling came in a suit filed by the American Civil Liberties Union on behalf of the Washington Mobilization Committee, an umbrella organization known by the term "Mobe." The group brought hundreds of thousands of persons to Washington in the late 1960s and early 1970s to register their protests against the war in Southeast Asia as well as other causes.

The ACLU local director, Ralph J. Temple, yesterday criticized the Appellate Court ruling as "not based on the record." He said the appellate judges "acted on their proclivities, which were quite evident at the time" of the oral orgument on the case.

Joining with Robb was U.S. Circuit Judge George MacKinnon and U.S. District Judge Raymond J. Broderick of Pennsylvania, sitting as a visiting circuit judge in this case. Rulings of a three-judge appellate panel can be challenged either by asking all nine members of the U.S. Court of Appeals here to rehear the case, or by appealing the case directly to the U.S. Supremem Court.

Former Police Chief Jerry V. Wilson, who headed the department at the time of the demonstrations and personally directed most of the police operations, said yesterday he had "always been on record as saying we did what necessary and just at the time. We never claimed we were perfect."

The demonstrations involved in yesterday's ruling ranged from such divisive national issues as the Vietnam war to the local question of whether the Three Sisters Bridge should be built across the Potomac River.

Each, however, had the common thread of ending in some violence and arrests. The number of arrests ranged from a handful at a Georgetown protest on an October night in 1970, to 12,000 over a two-day period in May, 1971.

The ACLU suit challenged not the activities of individual policemen in handling those protests, but rather the general policy of the police department on handling such incidents and the manner in which it actually quelled the protests at issue.

Waddy's opinion in the ACLU's favor was replete with examples from seven specific major demonstrations between 1969 to 1971, of innocent by-standers being clubbed and arrested by police, being illegally detained, and being denied medical attention in jail.

Yesterday's appellate ruling recounted the same seven protests, but from the viewpoint of a harassed police force confronted by violent mobs. It did not detail police misconduct, saying the specific members of the police hierarchy who were the defendants in the suit "cannot be charged with the aberrations of a comparative handful of individual policemen in a department consisting of 5,000 members."

"People blocking traffic at a critical intersection may breach the peace as fully as those who hurl stones," Judge Robb said. "The police have a duty to keep the streets and sidewalks open for the movement of traffic."

He said the "police line" and "failure to move on" statutes were specific enough to be constitutional. Judge Waddy had found the laws vague and therefore unconstitutional.

In making mass arrests, the police department was "concerned with the conduct of the demonstrators, specifically their violence and obstruction of the street," Judge Robb said. The Appeals Court judge said Wady's view that the police activity was greater than necessary because it resulted in the arrests of bystanders who were not participants in the demonstrations was "unrealistic."

The Appeals Court said a prosecutor could in the future "prove . . . that there was probable cause to believe that the group as a whole was violating the law" and that mass arrests were therefore an appropriate step for the police to take.

One of the most controversial acts by police during the Mayday demonstrations was the department's suspension of the use of field arrest forms, an omission that resulted in prosecutions being dropped against virtually everyone who was arrestred.

Judge Waddy had subsequently ruled in this case that the police department was prohibited from suspending the use of field arrest forms in the future, but the Appeals Court yesterday said such a blanket prohibition against future conduct was unjustifiable.

Yesterday's ruling was the latest in a spate of suits and court decisions involving the massive antiwar protests here in the late 1960s and early 1970s.Also on appeal currently is a jury verdict that awarded $12 million in damages to about 1,000 demonstrators who were arrested during a protest at the U.S. Capitol in early May, 1971.