Former senator Edward W. Brooke (R-Mass.) spent more than two hours yesterday in closed session with the Senate Select Committee on Ethics defending himself and criticizing the leak of a committee staff report on allegations of financial misconduct.

The 40-page report was Leaked to the Boston Globe. The paper said in yesterday's editions that, according to the report, the statements Brooke made about a $49,000 loan "constituted improper conduct which reflects unfavorably on the U.S. Senate."

The report, according to the Globe, says there is "insufficient evidence" to conclude any wrongdoing by Brooke on Medicaid claims he made on behalf of his mother-in-law and tax deductions he took on his two daughters while they were living away from home.

Sources familiar with the report said last night that the newspaper's version of it was essentially accurate. If so, it would leave Brooke legally clear of any formal allegation of "improper conduct" except for the $49,000 loan.

Brooke has admitted that he made a "misstatement" about the loan on his divorce deposition. A Massachusetts judge ruled last year that the misstatement did not constitute a serious enough offense to warrant a perjury charge against Brooke.

The staff report also notes that there was insufficient evidence to conclude that either Brooke or his attorneys withheld information from the ethics investigators.

Brooke, who was defeated in his bid for reelection last Nov. 7, brushed by reporters after his closed session with the committee, saying only "the truth will come out; it's in the hands of the committee."

The appearance of the report in the Boston paper raised a new mystery for the committee. (Chairman Adlai E. Stevenson (D-Ill.) said he had ordered an investigation into the leak.

Sources at yesterday's hearing said that Booke, his attorneys and members of the committee staff were asked under oath if they were responsible for the leak and all denied any part in it.

According to the sources, committee staff members said during the hearing that the leaked report was similar to an earlier 49-page report prepared by the committee's staff counsel, J. Douglas McCullough.

The larger report, which contained a forward with McCullough's conclusions and opinions, was circulated several weeks ago to committee members and staff but not to Brooke and his attorneys, the sources said.

The leaked version did not contain the staff counsel's conclusions. That report, according to Stevenson, was circulated to the committee staff and Brooke and his lawyers but not to the committee members.

Stevenson said that he had assigned several former FBI agents who are committee investigators to try to track down the leak.

There is no criminal provision for someone who leaks a confidcential committee document, a committee spokesman said yesterday.

According to the Globe, the staff report says that Brooke's handling of a cash settlement from an accident involving his mother-in-law "raises a serious ethical queation."

The committee has no authority to take any action against former members of the Senate such as Brooke. Stevenson said that a final report on Brooke's case would probably be issued by the committee within a week.