A former assistant to embattled federal housing official Emanuel S. Savas said yesterday that Savas was not telling the truth when he said he did not know that government employes were assigned to work on his privately published book.

Joseph Esposito, a former assistant at the Department of Housing and Urban Development, said Savas directed him to use HUD employes to prepare the manuscript. Esposito said he had questioned the situation, but that Savas ignored his concerns.

"He identified the people who would be used and he directed me to supervise the process," Esposito, who now works for the Agency for International Development, said in a telephone interview from Bangkok. "I indicated my great concern about his work being done by HUD employes. I expressed my concern directly to him."

Esposito also said that Savas had directed him to help research other articles that Savas published privately in professional journals. Esposito said he discussed the situation this week with HUD's assistant inspector general for investigations, whose office is looking into the matter.

Savas, an assistant HUD secretary, did not respond to requests for comment yesterday. A HUD spokesman said the department could not comment while the matter is under investigation.

The Washington Post reported Wednesday that Esposito had directed two GS-12 professional staff members at HUD to proofread Savas' manuscript in the summer of 1981, and that two department secretaries were asked to type the changes. Each employe spent several days on the book and had to put aside other work, according to department officials.

Savas is receiving royalties on the book, "Privatizing the Public Sector--How to Shrink Government," in which he argues that many federal urban aid programs should be eliminated or turned over to the private sector.

Savas has acknowledged that HUD employes worked on the manuscript during business hours, but he said he did not know about this until reporters questioned him earlier this week. He said he had asked Esposito to work on the book on his own time and was dismayed to learn that other employes were involved.

"This is clearly not a proper activity for government officials," Savas said earlier this week.

When told of Savas' account, Esposito said, "That is absolutely untrue. In fact, he asked for progress reports on virtually a daily basis."

Esposito said that Savas discounted his concerns "by indicating there was a close relationship between HUD's mission and the thesis of this book."

Esposito said he had to use the HUD library during working hours when Savas directed him to research a private article on Soviet computers. He said he took a more challenging job at AID last year, despite a $10,000 pay cut, and was "gratefully relieved to leave what I felt was a rather unethical situation."

"My honesty and integrity have always been very important to me," Esposito said. By cooperating with the inspector general, he said, "I expect to remove fully any taint which this incident may have placed on my reputation."

Esposito's account was corroborated by Roger Ahlbrandt, a former deputy assistant secretary in Savas' research division, who called a reporter this week to discuss the matter.

"Savas knew that Joe was doing work on that book on government time," Ahlbrandt said. "Joe had warned Savas that he was concerned about the ethics of it. Savas also knew damn well that these other people were working on it. He was putting them under great time pressure. Steve Savas is the one who's culpable in this."

Ahlbrandt said he left HUD last year in part because of Savas' conduct. "Savas is in there to build his own nest," he said. "He's really hurt the entire research and policy shop at HUD. It's completely demoralized."

Savas wrote the book under contract with the nonprofit Manhattan Institute for Policy Research, which said it paid him $6,000 plus royalties of 8 to 10 percent. The book has sold about 20,000 copies.

Savas' travel is under examination by White House counsel Fred F. Fielding. Savas charged the government for 20 trips to New York, during which trips he spent weekends at his home in Tenafly, N.J., after conducting official business. Savas said these were legitimate business trips and that he saved money by avoiding hotel costs.

Savas, a former professor at Columbia University, is one of the chief architects of the Reagan administration's policy of reducing federal aid to cities.