A presidential candidate advocating reduced government regulation of business was blasted by union members on the campaign trail today and backed by a panel of small businessmen.

All of which would be ho-hum news -- except that the candidate was Sen. Edward M. Kennedy (D-Mass.), a liberal who is normally considered a darling of labor and the bane of business.

The issue that had Kennedy nesting peacefully with his erstwhile adversaries was his proposed legislation that would sharply reduce federal regulation of the trucking industry.

The trucking deregulation plan is an outgrowth of airline deregulation, a pet Kennedy project that the senator pushed for years and helped steer to passage in the 95th Congress.

In his campaigning, Kennedy has cited his strong support of airline and trucking deregulation to answer complaints that he is a liberal who believes in big government.Kennedy has made a distinction between regulation of "health and safety" problems and regulation of commerce, saying he generally favors the former and opposes the latter.

This final day of a six-day campaign swing through the West was designed as a showcase for the candidate as an outspoken opponent of government red tape.

Kennedy's proposed legislation would allow truckers to raise and lower rates, within limits, without approval from the Interstate Commerce Commisson, and permit new firms to compete for trucking business without ICC approval. His plan is generally opposed by big trucking firms and the Teamsters who work for them, and supported by small truckers and some shippers.

The senator began his day at dawn in a meeting with Teamsters members on the loading dock of a big San Francisco trucking concern.

The drivers blasted away at Kennedy's ideas. "How can my boss complete if these other firms cut their rates?" one barked.What's going to happen to my job?"

Kennedy, in a feisty mood blasted right back. "if we are able to get some [rate] flexibility," he said, we'd ship more -- it'd be more jobs."

Neither the candidate nor his union questioners seemed to be moved one centimeter from their respective positions, but both sides seemed to enjoy the exchange.

When the half-hour session ended, Tim Richardson, the local union head who had peppered Kennedy with harsh questions, pulled out an old photo of John F. Kennedy and politely asked the surviving brother to autograph it.

Kennedy next flew to Reno to sit in on a hearing of the Senate Commerce Committee to get business reaction to the deregulation idea. The business witnesses split sharply on the Kennedy proposal. Spokesmen for large truckers and some warehouse firms attacked it, but witnesses from the paper industry, a major trucking customer, and from small truck firms warmly praised the senator's initiative.

"Reduction of federal regulation," said Donald S. Adams, a paper executive from Hamilton, Ohio, "will make a substantial contribution toward solving the problem of inflation," Kennedy beamed.

The hearing was held at a huge casino hotel here in a pink-and-gray room with a design motif that could be described as "gross excess." In the third row of the audience was an attractive brown-haired woman wearing brown gloves and a matching pillbox hat -- a lookalike of the Jacqueline Kennedy of 1961. Local police said dressing up like the former First Lady is the woman's hobby. Kennedy ignored her.

The candidate was scheduled to return to Washington late today on the new permanent campaign plane, a stretched 727 jet he picked up in San Francisco this morning.

The campaign has not yet named the aircraft. The traveling press has proposed numerous labels, including "Air Malaise" (pronounced Kennedy-style "ayeh mahlez") and other names which probably should not be repeated in a family newspaper.