The Reagan administration is considering a proposal to eliminate or redesign the U.S. Peace Institute before it comes into formal existence next year, according to administration officials.
Among the options are an end to the agency's funding or legislation to change its form and powers.
The institute -- which is to have access to classified documents -- is supposed to monitor conflicts with other nations and make proposals to negotiate peaceful settlements. The institute also is supposed to train government officials in "peace and conflict resolution" and fund peace studies at universities.
"As a sop to the Congress, we can buy into it in purely political terms," said a White House adviser who has consulted with the National Security Council on the future of the institute.
"We understand it as a gesture to peace . . . , but it should not come at the expense of saddling busy people with more headaches. There's no need for more bureaucrats to report to, more positions to hear out, more egos, when there is a crisis."
After decades of debate, Congress voted in September to create the Peace Institute, with 177 House members and 55 senators as co-sponsors.
"It is important to have a parallel to the Defense Department and the State Department pursuing peace on a daily basis," said Birdie Kyle, an aide to Sen. Jennings Randolph (D-W. Va.), a longtime advocate of the institute.
But, an administration official said, "We don't need any more leaks."
Although the legislation has passed Congress, President Reagan holds the key to its future. If he does not appoint a bipartisan 15-member board by April 20, there will be no board to receive the $16 million in authorized funding. So far, $4 million has been appropriated.
Robert J. Conlan, executive director of the National Peace Academy Campaign, a lobby that shepherded the legislation through Congress, said he fears that further funding may not be in the budget proposal Reagan sends to Congress in January.
"If we are not in the budget when it's printed, it will be very hard to get back in," Conlan said.
However, the drumbeat to the White House from conservatives, who view the Peace Institute as a potential government franchise for the left wing, wants it buried before it gets in the budget.
"The peace academy stands as a new weapon in the freezeniks' tactical arsenal," said a letter circulated in October by retired Army major general William A. Patch. Patch called it an "outrageous raid on the taxpayers' dollars."
Phillip Abbott Luce, president of Americans for a Sound Foreign Policy, sent a letter to his group cautioning that the institute was a "major victory for the far-left nuclear freeze forces."
No decision has been made, but White House and Office of Management and Budget officials said eliminating the Peace Institute remains the leading option. A second proposal is to send Congress a deferral of the $4 million 1985 appropriation, along with a legislative proposal to remodel the institute and downgrading it by removing its access to classified government reports.
But Conlan said he was telephoned last Friday by a member of the NSC and told that Robert C. McFarlane, assistant to the president for national security affairs, had directed his staff to redesign the institute to "make it work."
Conlan said he welcomes the administration's review, but found the call from the NSC discouraging. "Their basic attitude seems to be, since it was not invented here, it has no value," he said.
The administration's reluctance to accept the congressional mandate to create the Peace Institute is the latest episode in a long history of rebuffs. The National Peace Academy Campaign has fought since 1976 against arguments that such an institute would become a preserve of liberals trying to weaken the nation's defense by discouraging the use of arms.
With the aid of long-standing support from Randolph and Sen. Spark M. Matsunaga (D-Hawaii), who introduced a similar bill when he first came to Congress in 1963, the Peace Institute was passed in September as part of the Pentagon's authorization for 1985.
Passage of the $16 million came after the institute was scaled down to meet criticisms that had blocked it for decades. Its name was changed from Peace Academy to Peace Institute to reduce worries that it would become a huge bureaucracy.
The institute's degree-granting powers were removed to ease concern that it would rival the funding levels of the military academies, which average in the hundreds of millions of dollars; $7.5 million to build a facility to house the group was cut, and one-fourth of the institute's funds are to be channeled to schools for post-graduate peace studies, again to lessen its chance of having enough money to become a bureaucracy.