In a high-stakes showdown over the Army's refusal to recruit homosexuals, the Army's top military lawyer has threatened to recommend withholding millions of dollars in Defense Department contracts from universities whose law schools bar Army recruiters.

Maj. Gen. Hugh J. Clausen, judge advocate general of the Army, wrote law schools in May warning that he would recommend that no further contracts be awarded because the law schools prohibit employers who discriminate on the basis of sexual orientation from recruiting on campus. Harvard, Yale, Columbia, New York University, UCLA and Wayne State University all received the letter.

The six universities with which those law schools are associated received more than $41 million in research and other contracts from the Defense Department in the last fiscal year.

The judge advocate general directs 1,830 lawyers who conduct courts-martial, advise the Army chief of staff on legal issues and work on other legal matters. The judge advocate general is the top Army lawyer in uniform.

"Soldiers are required to live and work under entirely different conditions than civilians," Clausen wrote in support of the Army's exclusion of homosexuals, noting that homosexuality is a crime under military law.

Soldiers "must often sleep, eat and perform personal hygiene under conditions affording minimal privacy," he said. "The presence of homosexuals in such an environment tends to impair unit morale and cohesion as well as infringing on the right of privacy of those service members who have a more traditional sexual preference."

Clausen's letter was obtained by the National Law Journal, which is publishing a report on homosexual lawyers in its Monday edition.

In addition to withdrawing the contracts, Clausen also threatened not to let Army officers train at the universities and to have ROTC units removed from the schools.

"We will not submit to recruiting in a clandestine fashion like a second-class entity," he said.

In a statement yesterday, Clausen said the policy is based upon "military necessity."

Army spokesman Margaret Tackley said the Army will not hire homosexual lawyers nor recruit homosexual soldiers because "homosexuals are just not suitable for military service," even though Army lawyers live in private quarters rather than regular barracks.

"Our mission is to prepare for war, be ready," Tackley said. "In time of war you just don't dismiss a certain group of people and recruit new ones."

Army lawyers, she noted, accompany troops on field exercises. "If they're with an airborne unit and the soldiers jump, the law people jump, too," she said.

None of the six named law schools has changed its discrimination policies in response to Clausen's letter, but officials at several schools said their faculties were reviewing the letter to determine whether they should make a special exception for the Army.

NYU placement director Michael Magness said that law school faculties had adopted the policy against employers who discriminate against homosexuals "on a moral principle."

Homosexuality "has nothing to do with ability to be a crackerjack lawyer," Magness said. "What someone does at home at night between the sheets, that's their business."

Magness, whose university received $1.1 million in defense contracts last year, said, "I've never known a military lawyer to go into the trenches."

He suggested Clausen is annoyed because "he's lost the prestige schools" and is afraid that other law schools around the country might follow that lead and adopt similar bans.

Clausen also said the Army would not recruit law students from the schools that bar it from on-campus activity.

"Frankly, this is not a real serious issue for this school," Magness added, noting that only two NYU students had become military lawyers in recent years. "I don't think there's been a Harvard person going to JAG in 20 years, and the same at Yale and the same at Columbia," he said.

James W. Zirkle, Yale's dean of placement, called the letter "slightly belligerent," and said the threatened sanctions wouldn't have much effect on the law school, although Yale University received $2.8 million in defense contracts last year.

"We have so many private firms coming up here to interview that our graduates are not suffering from lack of opportunities," he said.

But Barbara Bruno, assistant dean of placement at Wayne State University Law School in Detroit, told the National Law Journal that the school was "very concerned about these threats. They are annoying and scary."

Bruno said, "With the job market as tight as it is, we have to think very hard about any policy that prevents potential employers from interviewing students."

"We feel quite strongly that our policy is an appropriate one," said UCLA Law School Dean Susan Westerberg Prager. "Particularly in the law school it is important to have the institution make the point that blanket kinds of discriminatory policies are simply not appropriate in this country."

But, Prager added, "Of course, we want to make sure that our students have access to all jobs."

The law schools are also disturbed that the Army discriminates on the basis of age and handicap as well as sexual orientation.

Clausen told the law schools he was also considering "writing each of your law students to let them know that they are being denied the opportunity to learn and avail themselves of placement oppportunities with the Army."

Although Clausen did not mention it in his letter, a federal law enacted in 1972, during the Vietnam war, generally prohibits the Defense Department from spending money "at any institution of higher learning if recruiters are being barred by the policy of the institution from the premises of the institution."

Officials at several law schools said they interpreted that law to cover only universities that exclude the military entirely, and said they did not believe it applied when just one part of the institution barred recruiting.

Pentagon regulations also prohibit homosexuals from serving in all branches of the armed forces.