A reputed mobster who was a witness in the investigation of Labor Secretary Raymond J. Donovan was arrested yesterday on a charge of murdering another witness in the same inquiry.

Philip Buono, 67, was picked up at his Bronx home and booked on a murder charge in the gangland slaying Aug. 25 of Nat Masselli, 31. He was shot in the back of the head as he sat behind the wheel of his car in the Bronx.

Described by investigators as a "top guy" in the Genovese family of the Mafia, Buono has been identified in FBI reports as a key backer of Nat's father, William Masselli, when the elder Masselli became a subcontractor on a series of New York City subway projects for Donovan's firm, the Schiavone Construction Co.

Nat Masselli was killed less than 48 hours before his father, now in prison, was to testify before a federal grand jury investigating alleged links between Donovan and members of organized crime.

Special prosecutor Leon Silverman closed that inquiry Monday, saying that "to date" there is no evidence that the the Masselli murder and Donovan inquiry are connected.

Buono was called as a witness in the Donovan inquiry earlier this year in connection with unsubstantiated reports that Donovan met in Miami in 1979 with William Masselli to discuss construction jobs in the New York area. Donovan has denied it.

Salvatore Odierno, 67, a reputed "soldier" in the Genovese family, was indicted earlier this month in the Masselli probe after being identified in a police lineup as one of two suspects seen fleeing from Nat Masselli's car.