The Chilean government paid legal fees and family support during 1978 and 1979 for Michael V. Townley, the man who was convicted of plotting and helping to carry out the car bombing assassination in Washington of exiled former Chilean diplomat Orlando Letelier, according to private letters Townley wrote from prison to officials in Chile.

Copies of 52 letters, covering the period from June 1978, two months after Townley was turned over to the United States by the Chilean government, to October 1979, were obtained by The Washington Post and authenticated by federal officials.

The letters portray the still-imprisoned Townley as frustrated and despondent over efforts by the Chilean government publicly to disassociate itself from him, and by the slow payment of his bills. At the same time, the letters contain assurances that Townley would conceal additional information concerning Chilean intelligence activities--including contacts with rightist European terrorists--from U.S. prosecutors.

During the Letelier assassination trials, federal prosecutors presented extensive evidence that Townley, an American citizen, was a senior agent in Chile's intelligence service, then known as DINA, and had carried out the September 1976 assassination of Letelier and an associate, Ronni K. Moffitt, under direct DINA orders. The Chilean government, which refused to extradite three senior DINA officials who were indicted in the case based on Townley's testimony, at the time characterized Townley as a low-level functionary in the secret police who never was authorized to assassinate anyone.

Since then, Chile consistently has denied any connection with Townley, including payment of his legal and personal expenses. In September of 1978, for example, Gen. Cesar Mendoza Duran, a member of the Chilean junta, denounced Townley as "an agent of the CIA, the KGB and at the same time an agent of Cuba." Asked yesterday about the information contained in the Townley letters, Juan Prado, a spokesman at the Chilean Embassy, said: "This is another lie. Every statement Mr. Townley makes about Chile is false."

The letters originally were obtained from an unidentified source by Taylor Branch and Eugene M. Propper, a former assistant U.S. attorney who headed the prosecution team against Townley and two Cuban exiles, who later were acquitted. Branch and Propper have written a book about the Letelier assassination due to be published in April. Last September, the authors turned over copies of the letters to the FBI, which has reviewed their contents and discussed them with Townley, who remains at an undisclosed prison serving the remainder of his plea-bargained sentence for conspiring to murder Letelier.

"The one thing you get from the letters is that he Townley was anything but low-level," said Lawrence Barcella, the assistant U.S. attorney now in charge of the Letelier investigation. "His knowledge of events and other intelligence operations belies his being a low-level functionary."

Based in part on leads taken from the letters, Branch and Propper assert in their book, titled "Labyrinth" that DINA and Townley were involved with other terrorist activities outside Chile, including an assassination attempt by Italian terrorists against former Chilean vice president Bernardo Leighton, who along with his wife, was critically wounded in Rome on Oct. 6, 1975.

Asked about these and related information contained in the book, Barcella said, "Townley has acknowledged enough of those things that I believe them to be true."

To date, the only publicly released information taken from the letters emerged last December, when federal officials confirmed a DINA plot in which Townley in 1976 smuggled a small quantity of deadly nerve gas into the United States for possible use on Letelier. The vial of nerve gas, disguised as a bottle of Chanel No. 5 perfume, was shipped back to Chile before the Sept. 21 attack on Letelier.

This week, the FBI is expected to turn over copies of the letters, or at least a summary of their contents, to members of Congress who have requested them as part of an investigation into Chile's human rights record. The Reagan administration last year persuaded Congress to lift a ban on U.S. arms sales to Chile, proposed by Sen. Edward M. Kennedy (D-Mass.) and adopted by Congress in 1976. But licensing for all such arms exports was conditioned on administration certification to Congress that the government of Chilean President Gen. Augusto Pinochet has improved its human rights record and has made progress in its own investigation of the Letelier killing.

So far, the administration has made no such certification. But the matter has taken on increased urgency this month to several U.S. arms and aircraft manufacturers that are seeking government licenses to export their wares for display in Chile during an international air show there next month.

David Kemp, the Chilean desk officer at the State Department, said that some firms have made "overtures" to department officials. "Some companies have made it clear they would like to participate, but they are being told that no applications can be approved until the certification is sent forward to the Hill," he said.

Kemp said the existence of the letters had been made known to State Department officials in an unclassified memorandum from the FBI, but he said he would not comment on "how we are considering them."

Based on his own knowledge of the letters from discussions with the FBI, Kennedy said in a statement yesterday that "one of the principal requirements which we in Congress imposed on any new security relationship with Chile was an end to the Pinochet regime's practice of aiding and abetting international terrorism. These letters are further confirmation of the regime's responsibility in this area."

"I believe there is no justification," Kennedy added, "for resuming any form of security relationship with Chile."

Barcella said yesterday that he was not qualified to comment on the current human rights performance of the Chilean military government, which seized power in a 1973 coup against elected leftist president Salvador Allende. "But with respect to progress on the Letelier investigation," Barcella said, "they Chilean officials haven't done spit since the day this thing happened. In fact, they have been dilatory and obstructionist."

Barcella said that when he and other prosecutors asked Townley whether DINA officials were paying the bills for his defense, Townley replied, "Don't expect me to answer questions that are going to kill the goose that laid the golden egg."

The bulk of the letters, most of which are typed and all but one of which are in Spanish, are addressed to the man Townley describes as his chief DINA contact, Gustavo Echepare. There is also one undated letter addressed directly to Pinochet and another 1979 letter to Gen. Odlanier Mena, head of the reconstructed Chilean secret police, renamed the National Information Center after the Letelier assassination.

In the letters, Townley laments that payments from his DINA contacts were too irregular and were causing great "insecurity" for his wife, Mariana, who lives in a DINA-owned house in Santiago, Chile, according to federal investigators.

In one Oct. 2, 1979, letter to Mena, Townley pleads: "From the time when this whole matter began, there have been answers to the necessities of my family and my legal defense. But each request has been delayed more than the one before, as if squeezing blood from a stone."

"Right now," the letter continues, "substantial sums are owed to my father and my lawyer's bill has not been paid since June . . . I can't say there hasn't been support, I repeat, there has been. Our necessities have been attended to, but inside all of this, something even more important has been lacking . . . it is . . . .the sense that the help that is given to us comes from family and as a protection that will continue until it is no longer required."

Some long passages are devoted to providing Mena with derogatory information about Mena's predecessor, DINA chief Gen. Manuel Contreras, who was removed as the head of intelligence shortly before a federal grand jury in Washington indicted him and two other officials in August 1978 for ordering the Letelier assassination.

"Speaking of current accounts," the letter says, " . . . Mamo Contreras' nickname has at least one if not more current accounts open in conjunction with the CIA, accounts that they use to pay the service for work done for the CIA or in conjunction with it."

Barcella said that the investigation turned up records that show Contreras siphoned money out of DINA accounts by arranging for wire transfers through a U.S. stock brokerage house in Santiago to New York and then into a personal account he maintained at a Washington, D.C., bank.

Last night a CIA spokesman said the agency would have no comment on Townley's allegation.

When Chilean officials refused to extradite Contreras, then-president Carter imposed a number of sanctions against the government.

Authors Branch and Propper and federal law enforcement authorities assert that the Chilean intelligence service was involved in a much broader campaign of terror against its critics than was revealed during the two Letelier case trials. The two alleged Cuban accomplices in the killing were first convicted, then retried and acquitted last May.

The book says DINA in 1975 had a hit list of expatriate opposition figures and dispatched Townley, one of its top agents, to Italy to arrange for the murder of Chilean Socialist leader Carlos Altamirano. The authors say Townley teamed up with rightist Italian terrorist Alfredo di Stefano, whose code name was Alpha. Finding Altamirano too heavily guarded, Townley and Alpha focused their attention on Leighton.

In a June 29, 1979 letter to his DINA contact, Townley states that during his interrogation by federal authorities and the trial, at which he was the government's chief witness, "My only desire has been at every moment to divulge and give up the minimum possible so that the public is basically satisfied and to withhold everything else."

In an earlier letter in April, Townley expresses the fear that investigators were "going to go very hard with their suspicions about Italy."

Townley also offered his DINA contact a potentially embarrassing bit of information that could link Chile's president directly with the Italian terrorists who directed the attack on Leighton.

"For your information, Pinochet met with Mamo and Alpha in Spain a while ago after the funeral of Spain's Gen. Francisco Franco . Alpha could be more embarrassing for Mamo and the government in the long term than maybe even the Cubans."

Barcella said investigators have confirmed that Pinochet attended Franco's funeral, but not the alleged meeting between Pinochet and the Italian terrorist. Franco's funeral was in late November 1975, seven weeks after the attack on Leighton.