A key government witness in the Abscam bribery trial of Sen. Harrison A. Williams Jr. (D-N.J.) admitted under cross-examination today that he had lied to FBI agents and defense attorneys but claimed he did so only to protect himself and his longtime friend, the senator.

In an explosive exchange at the end of the day, Henry A. (SANDY) Williams III testified that he told the senator's attorney, George J. Koelzer, that he had withheld information about a plan to accept $20,000 cash for the senator from representative of an Arab "sheik."

"He [Koelzer] said, 'Did you tell anybody esle?' And I said no, and he told me to forget about it," Sandy Williams said.

"I've never said anything like that in this case or any other. He's a liar," Koelzer angrily told reporters after the session.

During his day-long cross-examination, Koelzer had picked away at Sandy Williams' credibility. He cited unplayed Abscam tape recordings in which government agents and other alleged co-conspirators called Sandy Williams a crook and a hustler.

Sandy Williams, who is not related to the senator, also acknowledged that he was an unsuccessful enterpreneur whose failed ventures included deals to market laetrile, the compound whose effectiveness as a cancer treatment is disputed, and a new soft drink called "Congo Cola."

Sandy Williams did not back down from his testimony Tuesday that the senator had agreed to use his influence to help him in other business ventures in which the senator held a hidden interest years before either man met FBI undercover agents posing as Arab sheiks.