Attorney General William French Smith yesterday defended the controversial undercover techniques used by the FBI in the Abscam investigation and warned that the administration will resist any attempt to limit federal enforcement efforts, including those involving undercover investigations of public officials.

In a speech to the New York City Bar Association, Smith said, "The message is clear. Every corrupt public official, drug trafficker or organized crime figure should recognize that he is not beyond the reach of the law.

"By their very nature, these are clandestine crimes. Payment of a bribe is not a public event. Neither the person who pays nor the person who takes the bribe heralds that fact from the rooftops," he said.

Both the House and the Senate are conducting inquiries into the FBI's handling of the investigation in which undercover agents posing as representatives of a phony Arab shiek offered large bribes in exchange for legislative favors. In the aftermath, critics have charged that the FBI created the crimes.

Six congressman and one senator, as well as a number of lower level public officials, were caught in the net cast by the scam. Many of the cases are still in various stages of appeal.

But Smith, who was not attorney general when the investigation occurred, defended the FBI's actions. "In most cases, there is only one way for law enforcement to apprehend such criminals and deter such crimes. It must interject its agents into the midst of corrupt transactions. It must feign the role of corrupt participant. In short, it must go undercover," he said.

Although Smith conceded that undercover techniques can be improved, he said they must be "innovative. . . . Our techniques must be as sophisticated as those we want to catch.

"The most important lesson is not that federal enforcement techniques can be improved, but that public corruption clearly exists and must be effectively uncovered, prosecuted and deterred," he said.