Attorney General William French Smith says he believes federal courts may be jeopardizing their independence and prestige by overstepping bounds in certain cases and outlined a Reagan administration campaign to curb judicial activism.

But he protests that the administration is not engaging in any "attack" on the courts or lending its weight to congressional efforts to strip federal courts of authority to rule on controversial social issues.

In fact, he maintains, it is not the administration that is threatening the judiciary. The threat comes from the courts themselves, as a result of controversial decisions.

The courts "get into the political arena and by being in the political arena, they subject themselves to the same kind of to-do that the political branches are subjected to . . . . I think their independence and prestige is greatly enhanced when the courts through their own restraint stay within their institutional roles," he said.

Smith, in an interview with The Washington Post, defended a controversial speech he delivered Oct. 29 in which he said federal courts have gone beyond their proper role in cases involving abortion, school busing, prisoners' rights and other socially sensitive areas which they should have left to elected officials.

The speech was heavily criticized by some, in part because it was interpreted as a call for courts to reflect the conservative results of the 1980 election.

"We certainly did not say the Supreme Court should follow the election returns . . . . What we are saying is that we are following the election returns," Smith said. "The president has enunciated this judicial philosophy ever since he's been running for office . . . . As you may have noted, this president has a way of meaning what he says . . . and what we're doing is implementing one of his principal programs."

But Smith said he believes the courts should remain insulated from politics.

"The idea that this is an attack on the courts is totally wrong," Smith said. "What this is is commentary on the proper institutional role of the courts and what we, to the extent we can, are going to do about it."

But Smith did say the administration would attempt to reign in "judicial activism" though judicial appointments and through legal arguments the department will make in major cases.

"In prior cases courts have gone as far as they have gone because lawyers have urged them to go that far. Well, we're not going to be urging them to go that far, and I would assume that's bound to have influence over time," he said.

Smith was also asked about the administration position on extension of the Voting Rights Act, another area in which the government has run into criticism from both the left and the right.

Smith said criticism from civil rights groups and newspaper editorial writers that Reagan is accepting "a watered-down version of a watered-dowm bill" are "blatantly false."

He said the president does not favor a House-passed bill that would make it easier to prove violations of the law. He said such a change would "create uncertainty and doubt . . . and place the matter before the courts for another decade."

But Smith said the president is "100 percent" behind a straight 10-year extension of the law and would also approve a reasonable bailout provision that would exempt states and localities from provisions of the law after a certain number of years of good behavior.

Smith also addressed criticism from conservatives that in spite of the major changes following the November election, the administration is still enforcing liberal policies in many areas much as the Carter administration did.

Smith said this is because existing laws require enforcement. He added that until there are changes, the laws on the books will be upheld, no matter how unpalatable they may be to the people who elected Ronald Reagan president.

"There are some who think Nov. 4 repealed a lot of laws and we should act accordingly. Of course, that is not what happened," he said.

"So many people . . . just do not understand what goes on in the Justice Department. For example, there are a lot of people . . . who don't recognize that there are laws on the books that we are sworn to enforce which we may not agree with and which may be inconsistent with the administration's current policy. Our function here is to enforce the laws as they are on the books, not as we wish they were.

"Our function is to determine what that current state of the law is. We have to apply it, and as a result we are sort of at the crossroads. We get caught in the crossfire. I guess sooner or later we may get everybody mad," he said.

Smith said that policy has already led to attacks on the Justice Department from both the left and the right. "We've been accused of being out of control, accused of being the patsy of the White House . . . one publication called me a somnambulist, another said I'm wide awake," he said.

On the question of congressional legislation to cut back the jurisdiction of federal courts, Smith said the administration has not yet made up its mind. Some believe this prolonged silence on such a controversial issue has the effect of limiting the momentum the conservatives had hoped for.

In the interview, Smith was most critical of areas in which the courts have created new rights and remedies, often overruling elected officials at every level, as in abortion, school desegregation, welfare residency requirements for welfare recipients, prison living conditions and legal rights for illegal aliens.

"It has nothing to do with whether a fundamental right is important or not," he said. "It has to do with who is making the decisions . . . . You use a term like fundamental rights. Who can argue with fundamental rights . . . . But in a very real sense those terms have been used as constructs or devices for the courts rather than the legislatures to be making decisions in those areas.

"When it comes to competing values, when it comes to policy decisions, and there's a question as to whether it should be determined by the courts or the legislature, the presumption should be in favor of the legislature . . . .

"The legislature . . . is directly responsible to the electorate. They have a constituency," he said. "If they make wrong decisions, they're accountable. They're also in a much better position to make those decisions than are the courts . . . . They have a much better fact-finding procedure. In those areas where there is . . . an option, the presumption should be in favor of the legislature making the decision rather than the courts."

In his speech and in the interview, Smith was particularly critical of the Supreme Court's approach to discrimination cases not involving blacks. In the past two decades, the court has singled out specific groups--illegitimate children, women, aliens within the United States--for special judicial protection and has frequently struck down legislative actions which treated them differently from others.

This approach too, he said, "is used as a device to cause the decision-making to move from the legislature to the courts."

Smith did not say which groups he views as overprotected by the courts. Asked if he was talking about women, who have won major victories through these court rulings, he said, "We just have to see how the cases develop . . . . You have to make these decisions on a case by case basis . . . .

"We're going to review all the litigation in the controversial areas we're involved in," he said. "This has to be an effort to persuade the courts, but the courts ultimately will make the decisions. All we can do is to urge them to make what we consider to be the right decisions.

"There is nothing in our scheme of government which says that when the executive or legislative branches have not acted for whatever reason that it is the function of the judiciary to step in and cure all of the societal ills. If the legislative branch has not taken action in a given area it could be . . . because it had made a specific determination not to take action."

The attorney general said the department is continuing to assist in efforts to find fraud and abuse in government.

"We want to throw as many resources as we can throw into that area . . . . I suppose the food stamp program is the best example. We have indications there that organized crime is involved, and I'm not talking so much about the ultimate users as we are criminal elements that have gotten into this process, where the abuses are substantial," he said.

He also said he believes the department will be able to "handle" the budget cuts that are being proposed by the administration without violating campaign promises to get tough on crime.

"We think we can handle most of the cuts in softer areas but if we reach the point where we believe we're cutting into muscle or bone then I think it's incumbent on me to go to the president and tell him so."