The Reagan administration yesterday suspended efforts to start prosecuting the 800,000 young men who have failed to register for the draft.

The step was designed to give President Reagan a clear field as he decides whether to keep compulsory registration, which he opposed as a candidate, on the books.

Justice Department spokesman John Russell announced that, "We have notified the U.S. attorneys in the districts where we expect indictments to be forthcoming to temporarily refrain from seeking any prosecutions until the White House makes a decision on whether to continue the draft registration program."

Administration officials predicted that Reagan will announce his decision in January unless, as one put it, "he decides to eliminate registration before then as a Christmas present."

Justice put a hold on prosecutions just as a federal prosecutor in Minneapolis was on the verge of recommending to a grand jury that a young man be indicted for failing to register.

The Justice Department action, said Barry Lynn, an anti-draft activist, "is a tremendous victory. It gives President Reagan a chance to terminate registration without the complication of indictments."

Administration officials said that Reagan has not made up his mind on the issue and will lean heavily on the advice of Defense Secretary Caspar W. Weinberger, who is in Europe and is to return to Washington Monday.

Lynn predicted that the suspension of prosecution to give Reagan breathing room will encourage other 18-year-olds to join the ranks of the non-registrants, raising the total to a million by January.

The law requires men to register at their local Post Offices within 30 days of their 18th birthday. Failure to do so is a federal crime punishable by up to five years in jail and a $10,000 fine.

Despite that heavy penalty, nearly one-fourth of those required to register this year have failed to do so. They total 300,000 of the 800,000 men that Selective Service estimates are in violation of the law, which went into effect in 1980 after close votes in Congress.

On May 5, 1980, as that debate was heating up in Congress, candidate Reagan wrote Sen. Mark O. Hatfield (R-Ore.) that President Carter's effort to bring back draft registration "is an ill-considered one and should be rejected. Advance registration will do little to enhance our military preparedness."

"Instead, our national security demands an adequate reserve that can be called up at a moment's notice, and a skilled, experienced, all-volunteer force that can handle sophisticated equipment.

"Perhaps the most fundamental objection to draft registration is moral. Only in the most severe national emergency does the government have a claim to the mandatory service of its young people. In any other time, a draft or draft registration destroys the very values that our society is committed to defending."

According to some administration sources, Reagan's remarks were based on flawed Selective Service estimates that the requirement would save so little time in mobilizing for war that it was not worth enacting into law.

Also, the pro-registration argument goes, the Soviet threat has increased since 1980. Abandoning registration now, proponents say, would signal a lack of national resolve and give allies an excuse to slow their defense buildups.

Counterarguments include the claim that highly mobile teen-agers filing postcards at their Post Offices giving name, address, telephone number, birth date and Social Security number does little toward helping the military find, screen and train reinforcements in a hurry. No screening is done under the program.

Also, it would cost an immense amount to prosecute the 800,000 violators, and would alienate a huge segment of the population, critics of registration contend.

Reagan's Task Force on Military Manpower has gone over pro and con arguments extensively, but will not recommend whether or not to keep registration, sources said yesterday. They predicted that if Reagan scraps registration he will couple this action with a program to upgrade reserve forces.