The Senate's yesterday Billy Carter subcommittee yesterday selected Chicago attorney Philip W. Tone, a former federal judge, to be its outside counsel.

The appointment is expected to give important impetus to the investigation of Billy Carter and his ties with Libya. The probe had been suffering from a lack of leadership and focus as the subcommittee sought a distinguished attorney to take charge. Last week, former Watergate special prose cutor James Neal turned down the job, saying he could not spare the time from his private practice.

Tone, a Republican who was appointed to the federal bench by President Nixon, "will lend the subcommittee and its already aggressive and able staff of investigators and important element of nonpartisanship," said subcommittee chairman Birch Bayh (D-Ind.), who announced the appointment after meeting with Tone in Chicago.

Although Sen. Charles Percey (R-Ill.) recommended Tone to the subcommittee, Sen. Bob Dole (R-Kan.) complained yesterday that Republicans were fully consulted in this matter." Dole was not personally contacted although his staff was aware of the Tone selection, an aide said.

"Although Judge Tone has not been involved in any of the recent national 'gate' investigations, he does bring a wide experience as a practitioner, scoolar and judge" Dole said. He added, however, "The subcommittee desperately needs staff, space and money in order to do a capable and effective job. I hope Sen. Bayh will ensure that Judge Tone will be able to assemble the needed resources."

Since its creation on July 24, the subcommittee has operated under the aegis of Senate legal counsel Michael Davidson, with more than a dozen staff members scattered throughout the Senate office buildings.

Tone, 57, served as a district judge from 1972 until 1974 when he was appointed to the 7th U.S. Circuit Court of Appeals. He returned to private practice this year with the Chicago firm of Jenner & Block, where he is a partner with Albert Jenner, who was minority counsel to the House Judiciary Committee during the Nixon impeachment proceedings.

In 1975, Tone was on President Ford's list of five finalists for the Supreme Court seat eventually filled by another Chicago judge, John Paul Stevens.

A Bayh aide said Tone would begin immediately on a part-time basis and "gradually become more involved." It was not known when Tone would move to Washington to take charge full-time.

Subcommittee staffers said yesterday that substantive hearings will begin begin early next week when the Senate returns from a 10-day recess. A team of attorneys spent the weekend in Georgia interviewing Billy Carter and his business associate, Henry R. (Randy) Coleman, about their Libyan dealings. However, no dramatic discoveries apparently were made.

"Most of it has been pretty mundane," said an aide to a Republican senator in characterizing the documents and interviews so far. "We almost feel like the mop-up squad . . . The bureau [FBI] people and reporters have been down there. The subcommittee's is just one more visit from some people from Washington."

The subcommittee, made up of four Republicans and five Democrats from the Judiciary and Foreign Relations committees, is looking into Billy Carter's acceptance of $220,000 from the Marxist Libyan regime, his tardy registration as a foreign agent of Libya and any involvement in that relationship by President Carter or administration officials.

The president has denied any wrongdoing, and has said he is willing to testify before the subcommittee.

Subcommittee members say they want to finish hearings by Labor Day and issue a report by Oct. 4, in order to keep the investigation as free of election politics as possible.

Meanwhile, another Carter relative's foreign dealings are coming under scrutiny. The president's son, Jeff, is a partner in a computer mapping firm that recently won a $210,000 contract from the Philippine government, Time magazine reported yesterday.

Jeff Carter, 27, who graduated from George Washington University in 1978 with a degree in geography and a specialty in computer cartography, teamed up with Robert Mercready, a former Defense Intelligence Agency analyst, to set up a computer mapping system for the Philippines.

White House officials say there is nothing improper about the deal. Entering into a contract with a foreign government is no different from signing one with an American corporation," a White House spokesman said. "Members of the president's family have to make a living. Otherwise, we would have to create a welfare program for them."

Mercready and Jeff Carter first went to the Philippines in 1978 as consultants for the World Bank to make a study of solid waste disposal, for which they were paid $10,000, according to Time.

President Carter approved the trip, but told the State Department that Jeff and his wife, Annette, who accompanied him, were to be treated as ordinary citizens, Time reported.

"Nevertheless," Time said, "the visit was hardly routine. Mercready, Jeff and Annette Carter were met a the airport by (Philippine President Ferdinand) Marcos' younger daughter Irene. They paid a courtesy call on Imelda Marcos' (wife of the president). Jeff and Annette also were guests at Imelda Marcos' lunch for Chinese Foreign Minister Huang Hua."