The competing demands for limited amounts of atomic materials in the stepped-up U.S. nuclear weapons-building program forced President Reagan to make his production decision on neutron weapons last week.

But the main pressure behind Defense Secretary Caspar W. Weinberger's strong advocacy of the controversial new generation of nuclear weapons was the U.S. Army.

Its new "integrated battlefield" strategy for Europe-- which involves preparing American forces to fight conventional, nuclear and chemical battles all at once News Analysis News Analysis -- is highly dependent on its units possessing neutron weapons, according to Pentagon sources.

Reagan's decision makes the Army's "integrated battlefield" idea real for Europeans --which could create as big a furor in NATO countries as did the 1977 disclosure that the United States was going to build neutron weapons.

NATO allies -- particularly West Germany, the Netherlands and Belgium -- have never been at ease with the notion that short-range nuclear weapons are designed for use on their territory. In fact, NATO has never been able to agree on tactics for using these weapons.

The "integrated battlefield" is the Army's idea of how it would work, not on American territory, but in Western Europe.

On explosion, neutron weapons produce killing levels of radiation that travel a greater distance than the weapon's destructive heat and blast effects. With the nuclear battlefield weapons now in the hands of U.S. and NATO forces in Europe, the blast and heat effects far outdistance radiation.

Advocates of neutron weapons say they would cause less collateral damage in heavily populated areas of Western Europe than would the nuclear weapons now deployed there.

In addition, they say that the neutron weapons' radiation effects would help defend against Soviet tank attacks, because the radiation would penetrate tank armor and kill the crews far more easily than the heat and blast from the currently deployed weapons could destroy the vehicles.

Since the mid-1970s, the Army has been preparing for acquisition of neutron versions of its 56-mile-range Lance missiles and 22-mile-range, eight-inch artillery shells.

But the timing of last week's decision "was driven by the production demands" of the entire U.S. nuclear weapons program, which is run by the Department of Energy, sources said yesterday.

The United States is now embarked on the greatest nuclear weapons-building program in its history, which includes a new Trident I submarine-launched missile; a new warhead for the land-based Minuteman III; new strategic and tactical nuclear bombs; a new long-range, air-launched cruise missile, and plans for the proposed MX ICBM.

This creates competing demands for the limited amounts of nuclear materials used in these warheads and for space in industrial facilities around the country where these weapons are manufactured. As a result, the Energy Department wanted an immediate decision on neutron weapons.

As one Reagan official put it yesterday, the United States either had "to scrap the program or produce something."

The plan in effect when Reagan took office was established by President Carter in 1978. It called for producing all the components of the neutron weapons but assembling only a portion of the Lance warhead and eight-inch shell.

As a result, the Army was to have received relatively low-yield nuclear weapons that could be converted to more powerful neutron ones with the insertion of a component that was to be held separately.

Army generals had tried for three years to reverse the Carter decision. When the Reagan Pentagon team came into office, the Army repeated the arguments it had made unsuccessfully to the Carter administration:

Conversion of the new weapons to neutron ones would take months. And if the low-yield weapons were all the Army was going to get, it would need more of them because they were less powerful than the neutron versions the planning envisioned.

The generals quickly found they had an ally in Weinberger. They wrapped up their case by saying that if the production decision were made before this autumn, no time would be lost from their original planning.

Secretary of State Alexander M. Haig Jr., according to sources, had proposed a delay of the neutron production decision until spring.

He argued that raising the neutron issue before then could endanger the more important NATO plan to deploy 572 longer-range weapons-- cruise and Pershing II ballistic missiles.

Unlike the short-range neutron weapons, these missiles, although based in Western Europe, would be aimed at targets more than 1,000 miles away in the Soviet Union.

Though both types of weapons are designed to deter a possible Soviet invasion of NATO countries, the longer-range missiles are considered a greater threat to the Russian forces than are the neutron weapons.

According to sources, Weinberger opposed Haig, arguing that a delay on producing neutron weapons until next spring would upset the Energy Department's nuclear production schedules and give opponents of neutron weapons a new target date.

The defense chief also said that producing nuclear weapons was an internal U.S. decision and should not be made under pressure from other countries, an argument, sources said, that appealed to Reagan.

After a National Security Planning Group review, Reagan decided last Thursday to authorize production of neutron weapons but to stockpile them in this country. The latter decision was made in order to minimize protests from allies in Western Europe, where anti-nuclear groups oppose any basing of neutron weapons.

Weinberger's view prevailed over Haig's. At the same time, the president's decision made it clear that none of the neutron weapons would be deployed overseas without specific consultation with the NATO country where they would be based.

In fact, defense officials say the first weapons that come off the nuclear assembly line in the next few years will be given to Army units in the United States that are earmarked for the Western Europe theater.

That will allow time for discussion before the tougher question of deployment abroad must be addressed.

Pentagon officials said yesterday that because the initial neutron weapons are ticketed for U.S.-based forces, there has been no consideration of removing the 20-year-old nuclear eight-inch shells from the European countries where they are currently deployed.

One justification for building new shells is that the old ones are shorter range -- they fire nine miles -- and they do not have the new safety devices that would permit them to be rendered unusable should they be stolen by terrorists.

Ironically, therefore, the shells that most need to be modernized-- those in Europe -- will be the last ones to be replaced.

And the shells that are most protected -- the ones held by American soldiers on military bases in this country -- are to be the safest ones.