In a tiny cubicle, deep inside Panama's military intelligence headquarters, one of many telephones rang. Special agent Lino grabbed it, listened and swore under his breath.

"Okay get them both, and put a double watch on the old man in the prison hospital. They may be preparing his escape," he snapped. Turning to an aide he said: "Write that down, so it's on record."

Lino, as he is nicknamed, had reason to worry. Just a week earlier, an imprisoned Colombian, a big fish in the international cocoaine trade, had escaped from a local hospital, allegedly by bribing a Panamanian guard with $3,000.

"It's an old trick, getting yourself into hospital," Lino said. "The guy was lucky and it worked."

Now the old man, another kingpin the same smuggling network, apparently was going to try the same maneuver. The phone call was from an agent telling Lino that two women had arrived from Colombia with a message for the old boss in the hospital.

"One of the mis the mistress of another gang member," Lino said, "and this time I'm not taking any chances."

The arrest of the two women was the most recent in a series of 17 arrests unraveling an important cocaine-smuggling ring. The case is still causing reverberations in three Colombian cities, here in Panama and in Miami.

It began on June 9, with an airport bust that produced 145 pounds of pure cocaine with a U.S. street value of $5 million. The seizure was the biggest ever here, the Panamanians say.

Taken from police records and interviews, the case offers a classic example of dealings along an important stretch of the Latin American cocaine route. Between the time that the muddy paste made by South American peasants ends up as the precious white powder in the stashboxes of North American users, it frequently passes through Central America.

The narcotics agents in G-2 and Deni, Panama's military and civilian intelligence organizations, and the men of the U!S. Drug Enforcement Administration stationed here, like to cite the case as an outstanding example of teamwork.

Such cooperation, both sides agree, is a contrast with the early years of the war on drugs launched in the early 1970s.

"The DEA [agents] are our brothers. We tell them everything," said Deni director Darin Arosemena. "We let them participate in our activities, we invite them along on raids, they can sit in on interrogations, they get copies of our documents, anything they want."

DEA returns the compliments. In an Aug. 1 letter to national security chief Col. Manuel Antonio Noriega, Panama-based DEA agent Sheldon Reyher called the 145 pound bust and the uncovering of the powerful cocaine ring "a job well done" and referred to the "exceptional ability" of military intelligence personel.

In an interview, Reyher called panamanian agents "the most professional in Latin America."

In addition to praise, Panamanian intelligence receives DEA tipoffs, profiles of suspect travelers, U.S. police records and training of agents in the United States.

U.S. law enforcement officers believe that Panama has become such a "hot place" that traffickers may well be developing other routes. The Panamanian isthmus however, has long been one of the most convenient places for business transactions of any kind.

It has the dollar as its currency and liberal banking laws allow money to be moved in and out with remarkable ease. Some 40 ships of every nationality move through the Panama Canal each day and most commercial flights between North and South America makes a stop here.

"Our territory is used by foreigners and nationals as an ideal transit point where anything - but also drugs and money - change hands." security chief Noriega said. "But we can only stop being a pivot if we get information about wehat is going on outside Panama. We are now finally receiving better intelligence."

The much-heralded June 6 seizure at Panama's Tocumen airport, and the subsequent uncovering of the Colombia-Panama-Miami ring, apparently was tocuhed off by Panama. On a flight from Medellin, Colombia, an agent discovered two Colombian passengers whose suitcases were stuffed with 55 bags of cocaine.

Police learned that the Colombians had made seven earlier trips carrying cocaine and had slipped out of the airport unnoticed with the help of two Panamanian customs agents. But the two travelers, paid $1,000 per trip, were only the "mules."

The kingpin, they said, is a Colombian businessman who, pending court action, is known as "Don Octavio."

The drugs normally were taken to an apartment rented by another Colombian who frequently visited here, said Don Octavis during interrogation.

Now in a hospital after a cancer operation. Don Octavio also told Lino he would first advised Miami that the "merchandise" from Colombia had arrieved.

Then the other Colombian, who is now in a Panama jail, would rent a car, load it with cocaine, and leave it in the parking lot of the local Holiday Inn.

Upstairs, an American paymaster would weigh and test the drugs, and pass over the money. One piece missing from the puzzle is who run the drugs to Miami.

Lino has been to Miami to assist on the case, where he said a U.S. lawyer for the lring offered a bribe. Two Americans charged with participating in the ring in Miami, are out on ball at present. But DEA and G-2 say they feel that completion of the puzzle is only a matter of time.