West German authorities sought to clamp a news blackout on the case of kidnaped industrialist Hanns-Martin Schleyer today in a grim bid to gain time to either negotiate his release or track down the terrorists his release or track down the terrorists holding him.

It was annouced that a summit meeting between Chancellor Helmut Schmidt and British Prime Minister James Callaghan, scheduled to begin here Friday has been postponed because of the incident.

Schleyer was taken captive Monday night in Cologne when submachine gun-wielding leftist terriorists ambushed two cars in which he and security agents were riding. A driver and three policemen were killed.

The kidnaping is the latest in a wave of terrorist killings and bombing - including the murders of banl President Juergen Ponto in July and federal prosecutor Siegffired Buback in April - that have stunned West Germans.

In the Schleyer case, the government appears to have communicated with the terrorists primarily byradio and television. The captors at first called news agencies and later demanded that letters citing their terms be forwarded by police to news agencies for publication.

Today, federal police in Wiesbaden, indicated that the government was ready to negotiate with Schleyer's abductors but they gave no details and said the previous means of communication was impractical. They urged the terrorists to name a mediator.

Schleyer, 62, is head of Germany's Federal Inudstrial Association, a close adviser to Chancellor Helmut Schmidt and a board member of the DiamlerBenz automobile company.

West Germany's terrotists have focused heavily on attacks against law-en-forcement officials in the past five years - 15 attacks since 1972 - but they telegraphed their intent to widen the target of their terrorism when they killed bank president Ponto in July.

The abductors are demanding, in exchange for Schleyer, the release of 11 jailed leftist terrorists and anarchists, five of them women.

A letter released earlier today by police, as demanded by the terrorists,indentifies the 11 as the three surviving members of the notorious Baader-Meinhof gang - Andreas Badder, Gudrun Ensslin and Jan-Carl Raspe - plus three others - Karl-heinz Dellwo, Hanna Krabbe and Bernd Roesner - who took part in the 1975 attack on the German embassy in Stockholm in which two diplomats died.

Two others - Guenter Sonnenberg and Verena Becker - are suspected in the assassination of prosecutor Buback.

The other three are Ingrid Schubert, Irmgard Moeller and Werner Hoppe, in custody for robbery, suspicion of murder and attempted murder, respectively.

In the letter, the abductors demanded that each prisoner be given the equivalent of $43,000 and allowed to fly to the country of his choice, and that the government promises not to extradite them.

A group calling itself "the Siegfried Hausner Commando Group of the Red Army Faction," the name by which the Bander-Meinhof group is known, has claimed responsibility for the kidnaping.

The killing of Ponto in July by the "Red Morning" group is also believed to have happened during an attempt to kidnap him.

The wave of incidents has increased impatience here with the government's inability to do much about the terrorists, although it is not clear that a government could protect all the potential targets or mop up the estimated 1,200 urban guerillas in this country.

Newspaper editorials, even in liberal papers, show less concern about possible accusations of government overreaction.

The government has introduced tougher new bills, long sought by the conservative opposition, aimed at speeding up trialss, increasing penalties for possession of firearms and suspending lawyers suspected of supporting terrorists.

People are fed up with the idea "that a helpless state is preferable to a state without a heart," said the conservative Die Welt newspaper.

Several papers warned that the continuing cycle of success of the "Red Army Faction" will attract still more sympathizers unless it is broken.