President Reagan fired another salvo at the nation's largest teachers' union yesterday, accusing the National Education Association of blocking "badly needed reforms" in pay, promotions and tenure, and defending his call for merit pay for teachers.

In a letter to NEA President Willard H. McGuire, Reagan endorsed the "master teacher" concept pushed by Tennessee Gov. Lamar Alexander. The plan would offer incentive payments of up to $7,000 a year to teachers who qualify. It was blocked in the state legislature this year because of opposition from a NEA affiliate, the Tennessee Education Association

Reagan called for merit pay for teachers in a speech last weekend at Seton Hall University as a way of improving school performance without increasing school costs. That prompted the NEA, which has become an important force in Democratic presidential politics, to accuse the president of making a "disgraceful assault" on the teaching profession.

The NEA has fought merit pay, and demanded across-the-board salary increases for teachers.

Yesterday, Reagan said, "My intent was . . . to raise my voice on behalf of the thousands of outstanding teachers whose compensation is held down by pay scales that fail to recognize and reward many distinguished teachers by paying them commensurate with their worth."

Reagan said that "until the NEA supports badly needed reforms in salary, promotion and tenure policies, the improvements we so desperately need will only be delayed."

McGuire, in a response, repeated the NEA's contention that merit pay "is an old idea that hasn't worked either in the public or private sector." But he called Reagan's letter "a very positive sign" because the NEA "may be moving toward a dialogue" with Reagan for the first time.