A Bronx County Grand Jury indicted balding, gray-haired Salvatore Odierno, 66, today for intentional murder in the mob-style slaying of Nat Masselli, 31, son of a witness in a special prosecutor's investigation of Secretary of Labor Raymond J. Donovan.

In a news conference afterward, Bronx District Attorney Mario Merola suggested that Masselli may have been killed because of feuding among organized crime figures over the assets of the trucking company owned by his father, William Masselli, 56, after the elder Masselli began serving a prison term last February.

Odierno, who suffers from diabetes and arthritis, is being held for his own protection in a special section of Riker's Island prison, where he was jailed without bond.

Investigators suggested that Odierno's alleged role in the Aug. 25 killing, for which two other suspects have also been identified but not yet arrested, left him in disfavor in the Genovese crime family, in which he is a reputed "soldier."

Nat Masselli was shot in the back of the head while sitting at the wheel of his parked car. His assailants fled in a red Pontiac that was traced to Odierno.

At his news conference, Merola steadfastly refused to rule out any motive for the killing, including the possibility that it was meant as a signal to Masselli's father, another reputed "soldier" in the Genovese crime family. The elder Masselli had been brought to New York the day before the killing to await an appearance before a federal grand jury assigned to the Donovan investigation.

Merola, however, strongly suggested that money may have been a more immediate motive. William Masselli's company, Jopel Trucking, had collected millions of dollars as a subcontractor on New York City subway projects for Donovan's firm, Schiavone Construction. But Jopel began disposing of its assets when Masselli started serving a seven-year federal prison term in February on hijacking and narcotics charges.

Most of the assets apparently went to the Red Apple equipment and Red Apple construction companies, which were formed not long after Masselli went to prison. The companies are headed by Robert DeFilippis, a long time Masselli associate who acquired Jopel's 26 trucks by assuming the mortgage on them. Nat Masselli was hired as a Red Apple superintendent for $1,200 a week.

Merola disclosed today that Nat Masselli was caught up in an "argument," which other sources said ended in a physical brawl, about a week before he was killed.

"There were some people cut out" in the transition from Jopel to Red Apple, Merola said, and Nat Masselli "obviously tweaked the nose of other individuals who were obviously in the proceeds that these businesses, plural, received."

Nat Masselli last saw his father at the metropolitan correctional center in downtown Manhattan around 6:15 p.m. on Aug. 25, about two hours before he was killed. According to Merola, the younger Masselli then stopped somewhere else--Merola wouldn't say where -- before proceeding to the Van Cortlandt Park area of the Bronx, where two men joined him in his 1977 Lincoln.

At least one witness identified Odierno as jumping out of the Lincoln and fleeing for his Pontiac, pursued by an irate motorist wielding a tire iron. Investigators said a suspect from the back seat, apparently the trigger man, stumbled out of the two-door coupe with great difficulty, shouting "Hey, wait for me," and was taken for a drunk.

Both suspects escaped in the Pontiac, which was driven by a third man. Merola refused to identify the two suspects still at large. He said he is still seeking enough solid evidence on which to indict them.