The Navy's cruise missile, the Tomahawk, experienced its most severe failure yesterday in 17 months of flight testing.

The missile was supposed to shoot on rocket power out of a submerged submarine tube for the first time and then fly on its engine about 60 miles down the California test range to find and hit a target ship.

Although the Navy labeled the test a "success" as far as the Tomahawk's clearing the torpedo tube, the missile became unstable right after its internal engine started at an altitude of 2,-000 feet, and dived into the Pacific Ocean out of control.

No failure in the previous 21 tests has been as drastic as yesterday's near San Clemente Island.

The Navy aid the missile was successfully launched from the torpedo tube at 1:33 p.m. Pacific coast time but fell into the ocean 30 seconds after. No cause has been determined.

After the rocket motor shoots the Tomahawk to an altitude of about 2,-000 feet, wings are supposed to sprout from the missile's sides so the jet engine can fly it accurately to the target at subsonic speeds.

It is believed that the engine started up but that shortly afterward the missile started to tumble. The Tomahawk that plunged into the sea is worth about $1 million.

The Navy has the Tomahawk in the advanced development stage but has not yet ordered it into production. The Air Force is developing another cruise missile to be launched from aircraft.

The cruise missile is one of the main sticking points in U.S.-Soviet arms control negotiations. Soviet leaders contend its high degree of accuracy and range -- which could easily be over 2,000 miles -- make it a strategic weapon that must be included in any strategic arms agreement.

In an attempt to allay Soviet fears about the cruise missile, U.S. negotiators reportedly offered to restrict flight testing of the sea and ground-based weapon for a limited period. This would slow its pace toward deployment.