White House counsel Lloyd Cutler said yesterday that the Carter administration would like to amend the 1978 Ethics in Government Act to prevent charges of minor crimes from triggering the appointment of a Watergate-style special prosecutor.

Cutler told a breakfast meeting for reporters that the recent appointment of a special prosecutor to investigate allegations that top Carter campaign aide Tim Kraft used cocaine in New Orleans two years ago illustrates the problems with the law.

He suggested that the threshold of evidence needed to trigger the law is entirely too low, that crimes that do not bear on an official's job performance be eliminated from consideration and that a target who is not charged be reimbursed by the government for legal fees.

"If we ever get to the stage where there isn't one [special prosecutor investigation] going on, we'd offer amendments," Cutler said. He added later that no amendments have been drafted.

There have been deep misgivings in many quarters, including the Justice Department, about the performance of the special prosecutor provisions of the 1978 law. Cutler's comments yesterday are believed to be the first by a White House official on the controversial subject.

The bill was passed after much debate in Congress as part of a post-Watergate package of reforms. It was pushed by such groups as Common Cause and the American Bar Association.

The provisions of the act were first invoked a year ago when two owners of the New York disco Studio 54, trying to escape their own legal problems, accused then White House chief of staff Hamilton Jordan of cocaine use. After several months of investigation, the special prosecutor, Arthur Christy, announced that there was insuficient evidence to bring charges against Jordan.

Under the law, the attorney general has 90 days to conduct a preliminary investigation to see if the charges are "so insubstantial" as to warrant no further investigation. In the Jordan case, Attorney General Benjamin R. Civiletti said he was forced to ask a special court to appoint a special prosecutor because some witnesses wanted immunity before being questioned by the FBI and the legislative history of the law precluded Justice Department officials from granting immunities.

Sources have said that Evan Dobelle, another Carter aide, triggered the Kraft investigation when questioned in a Jordan grand jury hearing.

Cutler complained yesterday that the threshold for triggering the act "is about one-tenth of a millimeter high -- it could be one witness.'

Civiletti and Philip B. Heymann, head of the department's Criminal Division, have said they fear the law could be abused, especially in an election year, by charges that couldn't be totally dismissed within 90 days, and thus required the appointment of several special prosecutors.

William B. Spann, past president of the American Bar Association, one of the main supporters of the law, said in a phone interview yesterday, that he feels it is working well and shouldn't be drastically altered.

"I think it's been the most happy solution we could have proposed," he said. "It is serving rather well. Jordan comes out looking clean and an independent prosecutor said so. [If former Attorney General Griffin B.] Bell or Civiletti had said he's clean, someone could say, 'Sure, but he's part of the team.'"

Spann said perhaps the quality of evidence needed to trigger the bill could be raised, but disagreed with Cutlers suggestion that crimes unrelated to job performance not be considered. "Whether it's a break-in to steal money or dope, it's a crime. If you eliminate this you come back to being open to a cover-up charge."