Attorney General William French Smith and FBI Director William H. Webster said yesterday that the government has made major gains against the nation's 25 organized crime families.

In testimony before the Senate Judiciary Committee, Smith said there have been 1,278 convictions of organized crime figures in the past two years.

"We have scored dramatic successes against organized crime," Smith told the committee.

"We have indicted and convicted numerous high-level members of syndicate families, . . . including the top structure of organized crime families regarded as untouchable a few years ago," he said.

Webster said the successful convictions have made a dramatic difference in the willingness of lower-level Mafia operatives to cooperate with the FBI once they are arrested.

"We're demonstrating to the street soldier that the so-called protection and respect he was promised are not so good if the top people can be taken out by the FBI. The entire Cleveland hierarchy has been taken out," Webster said.

"We're already seeing more cooperation from lower-level people who are in trouble. . . . They're nervous, they're distrustful and they're cooperating," Webster said.

Webster said that the FBI has discovered "substantial evidence of a 'commission' that resolves inter-family jurisdictional grievances, decides major policy and ratifies new bosses."

Webster said the commission includes representatives of the nine leading organized crime families, including the five New York families and those from Philadelphia, Detroit, Chicago and Buffalo.

Webster estimated that there are 2,000 so-called "made" members of La Cosa Nostra who have gone through a formal initiation process, and perhaps 10 times as many associates who participate closely in their criminal enterprises.

Webster said the FBI has found organized crime "contacts and influence" in four major labor unions.

Smith told the committee that he wants tougher laws to fight labor racketeering.

The attorney general also asked for tighter bail regulations, stricter sentencing with no possibility of parole, legislation to ease government seizure of criminal assets, and modification of the exclusionary rule preventing police from using illegally obtained evidence.

Although the committee is likely to approve some of the changes, Smith met skepticism from senators who charged that the administration talks about fighting crime, but has not been willing to spend money.

"No one is prepared to say a word against your efforts to drive out organized crime," said Sen. Howard M. Metzenbaum (D-Ohio). "But this administration . . . has actually cut back funds for fighting organized crime."

He said Americans also are concerned with street crime while "this administration cuts back on so many of the human services programs that it forces people to go out to steal to feed their families."