The word went out a few hours after daybreak yesterday, spreading rapidly from wives to husbands, paper handlers to printers, editors to reporters, and machinists to mechanics.It went swiftly to news executives and politicians around the country, from New York to Miami, Chicago to Los Angeles.

And everywhere the word was bad.

A 128-year-old newspaper -- an institution employing more than 1,400 full-time workers -- was going to fold in two weeks, leaving the nation's capital with just one daily paper.

"It is," said President Reagan, reacting to Time Inc.'s decision to close The Washington Star on Aug. 7, "an extremely sad day. . ."

"I was born here," said NBC correspondent Roger Mudd, "and grew up with The Star and, really, I've lost one of my oldest friends."

"If any town should have two newspapers," declared Rep. Silvio Conte (R-Mass.), "it's Washington. It's a hell of a loss to this town."

The news was stunning, bewildering and -- to some -- infuriating.

George Burkett, a Star mechanic for 22 years, heard it from his wife when she called him from their Waldorf, Md., home shortly after he reported to work at the paper's Southeast garage.

"Did you hear the news, George?" she asked, after hearing it herself only seconds before on television. "The end is near."

In the Star building in Southeast, Erving Davis gathered with 40 other pressmen to hear the news intoned by operations director Francis Price. Trembling slightly, and smoking cigarette after cigarette, Price began, "We regret to inform you . . ."

Later, when the initial shock had passed, Davis stood outside the building in ink-stained pants and heavy work boots, and quietly growled. "This can't happen. I got two kids. I've been here 15 years. This can't happen."

"Time Inc. said they would keep the paper open no matter what," said Mary McGrory, a columnist and Star writer for 33 years who had refused to believe the rumors. "I was going on Time's pledge."

But after the announcement yesterday, there was no discounting the pervasive feeling of finality that had settled in.

"Everytime we were on the precipice in the past," said reporter Maureen Dowd, "there always seemed to be a Superman waiting to swoop down and save us. This time, it's really surreal. . . There's no one out there."

When the bad news was finally confirmed in those few uncertain hours after daybreak, workers immediately expressed shock, sadness, and loss. But there were also feelings of outrage and betrayal -- not only over Time's decision, but over how the decision was made known to them.

Time Inc. executives had originally called -- then canceled -- a staff meeting at which their decision was to have been announced to Star workers. So as the executives were holding a news conference at the Madison Hotel to announce Time's decision, Star workers were having to learn of the news from spouses, radios, televisions, and copies of a brief Time Inc. memorandum that was posted in various sites in the building.

"That's sort of the ultimate in 'screw you,'" said sportswriter Morris Siegel, who learned of the decision when a stockbroker friend called to tell him he had read it on the teletype.

Time Inc. spokesman Donald Wilson said later that because Star employes report for work at different times it would not have been possible to inform them all in advance. "Once the decision was made, we wanted above all to announce it in The Washington Star," Wilson said. "That was our goal and we accomplished it. We didn't want Star staffers to learn about it in the morning paper. That would have been the cruelest way."

Throughout the day dozens of television, radio and newspaper reporters congregated outside the Virginia Avenue SE entrance to The Star building, waiting to buttonhole and interview Star reporters, executives and editors. Earlier, Time Inc. officials closed all other entrances and refused to allow persons not bearing Star identification cards to enter the building.

"Anger, grief, uncertainty," replied associate editor Eileen Shanahan, when asked about the mood inside The Star building. "It's tragic. I think it is a tragedy for the city and a tragedy for the nation."

To Star employes, however, the immediate tragedy is the seemingly inevitable loss of their jobs. While one opportunistic woman representing a D.C. employment agency cheerily handed out leaflets and flyers to passersby outside The Star building, several newspaper distributors were gathering on a nearby loading dock. Paul Gaffney, a Star employe for 29 years, said simply, "I don't even feel like looking for another job."

"I had a feeling," said Douglas Jordan, a 61-year-old truck driver, "something like this would happen before I retired."

Eleven labor unions, ranging from the Teamsters to the Typographers, are represented at The Star, and yesterday Robert E. Petersen, president of the Greater Washington Labor Council, said a meeting was scheduled last night of all 11 union heads to discuss Time's decision.

Melvin Newman, a paper handler of The Star for 22 years, put it this way: "The pressmen, the typographers, a lot of those guys are skilled. Me? I'm just a handler. There's not much demand, you know?"

Somewhat brighter -- but not much -- was the plight of the more than 200 Star newsroom employes, the reporters and editors who are its lifeblood. Newspaper executives from around the country called The Star yesterday, seeking possible candidates for job vacancies. Bulletins from the Knight-Ridder News Service and The New York Times were posted in the newsroom announcing visits by company executives who hoped to recruit Star reporters.

At the other end of the presses there remain, of course, the devoted Star readers who expressed dread yesterday over the impending end of a city institution.

"The nation's capital," said Charles Kupfer, a Bethesda student, "shouldn't be dominated by one newspaper. . . The more opinions and ideas circulating around the city, the better."

Maurice Goff, a Washington furrier, said, "I always like to know there's another paper, a cross section of views."

Meanwhile, yesterday afternoon, in The Star's thrid floor newsroom, reporters, editors, copy aides, secretaries, clerks -- and whoever else wished to drop by -- held a party to celebrate the past. Originally, the party, planned days ago, was intended to be a sendoff for Executive Managing Editor William F. McIlwain, who will soon depart to become editor of the Arkansas Gazette in Little Rock.

Earlier yesterday, McIlwain had been the only high Star official to meet with newsroom employes about the decision. On crutches from a recent operation, he had climbed atop a desk, stood, crutches and all, looked out over the newsroom and said to those gathered, "I admire you all."

With yesterday's events, McIlwain's afternoon going-away party was broadened to include everyone. So a spread of food -- including two trays of salami, brie and other cheeses and crackers -- were laid out before the celebrants who also partook of wine, beer, bourbon and champagne. Phil Gailey, a national staff writer for the paper, played his autoharp for entertainment.

Then, at 5:06 p.m., Editor Murray Gart addressed the assembly. "I love you," he said.

Within minutes the tops of filing cabinets were decorated by empty champagne bottles. People hugged and kissed, they drank and reminisced, and others went about writing stories for today's editions of The Star, talking long-distance on telephones to prospective employers and giving the news to faraway friends.

And in the center of the crowd with a six-layered chocolate cake, topped with chocolate and vanilla icing that formed four simple words: The Star Is Best.