Sen. Edward M. Kennedy's early withdrawal from the 1988 Democratic presidential race makes Sen. Gary Hart the front-runner for the nomination and opens the contest to a larger field of possible challengers, party leaders and strategists in both parties said yesterday.

The Massachusetts senator's surprise announcement -- which many took as an end to his hopes of ever being president -- immediately catapulted Hart to the front of the Democratic pack.

A Gallup Poll last July showed Hart as the second choice to Kennedy for the 1988 nomination among Democrats and holding a narrow lead over Kennedy among independents. Runner-up to Walter F. Mondale for the 1984 presidential nomination, the Colorado senator has a level of name recognition and favorable impressions which no one else among the prospective contenders can match at the moment.

Hart had already set Jan. 4 as the date for announcing whether he will seek a third term as senator next November or step down to concentrate on another presidential bid. Kennedy's announcement solidified the already-heavy betting among Hart's close associates that he will leave the Senate.

Among other, more speculative 1988 contenders whose chances may be advanced by Kennedy's withdrawal are New York Gov. Mario M. Cuomo, Sen. Joseph R. Biden Jr. of Delaware and Rep. Richard A. Gephardt of Missouri. Politicians who mentioned them also said that other, lesser-known contenders, such as Massachusetts Gov. Michael S. Dukakis, may be emboldened to run now that Kennedy has cleared out of the way.

"The person who occupied the biggest part of the room has walked out," said Democratic pollster Peter D. Hart, "and that opens up an awful lot of space. Many newer-generation Democrats who would have been afraid to challenge Kennedy now will start to look seriously at the race."

Among those mentioned by several observers are two retiring governors, Bruce Babbitt of Arizona and Charles S. Robb of Virginia, who have been prodding the Democratic Party to move away from the traditional liberalism embodied in Kennedy and Mondale. Kennedy himself had attempted this year -- by speeches and occasional Senate votes -- to soften his long-established liberal image, but his potential candidacy was worrisome and unwelcome to most border-state and southern Democratic officials.

Because Cuomo set off sparks at the 1984 Democratic national convention with a speech invoking many of the same liberal themes that Kennedy had voiced in his 1980 campaign against President Jimmy Carter, many observers said he may be adopted by the liberal wing of the party as its favorite candidate.

"Cuomo is certainly going to feel pressure from the liberal groups to clarify his availability," said Democratic campaign consultant Paul Maslin. The governor has told questioners he is concentrating on his reelection race in 1986, where he is strongly favored, but in recent weeks has disclosed that he will increase what has been a minimal schedule of out-of-state appearances.

Until now, Cuomo has turned away questions about his candidacy by saying he was sure that Kennedy would be in the race and implying that he would not challenge the Massachusetts senator. Now that reason has been removed. Cuomo has close ties to the AFL-CIO, whose leaders were highly critical of Hart during last year's Hart-Mondale presidential primary battles. Some top unionists, who were critical of Kennedy's endorsement of the Gramm-Rudman-Hollings deficit reduction act, said privately that they were ready to back Cuomo even against Kennedy.

With the withdrawal of the 53-year-old Kennedy, Cuomo, who is the same age, is the "old man" of a youthful Democratic field. Hart is 49 and the others are younger -- a point which may be of significance if the Republican nominee is 61-year-old Vice President Bush.

Gephardt, 44, and Biden, 43, have been two of the busiest Democrats on the 1985 speaking circuit, and both were regarded as potential 1988 candidates even before Kennedy's withdrawal. Like Hart, they have attempted to position themselves as less doctrinaire and more pragmatic than the older-generation liberals. Biden is regarded as a near match for Kennedy or Cuomo in oratory, while Gephardt, the chairman of the House Democratic caucus, has built a mini-machine of allies in the House and younger Democratic officeholders in key primary and caucus states.

But neither man has the advantage Hart possesses: public recognition and the residue of the campaign organization that was mobilized during his challenge to Mondale in 1984. While Hart is still struggling to pay off the financial debt from that race, he has maintained contact with the activists who gave him victories in New Hampshire, Massachusetts, Ohio, Florida, California, and most of the western states.

Only the Rev. Jesse L. Jackson, the third-place finisher in 1984, has such a built-in network of supporters. Jackson is considered a likely contender again in 1988, but few observers give the civil rights activist a realistic chance of being nominated.

The front-runner status that Hart inherits by Kennedy's withdrawal could be a mixed blessing. In 1974, when Kennedy pulled out two years before the next presidential contest, none of the early favorites -- Mondale, Sen. Henry M. Jackson or Sen. Hubert H. Humphrey -- was able to take hold, and long-shot Jimmy Carter won.

In 1982, when Kennedy again withdrew two years early, Mondale was the immediate beneficiary, with many speculating that Sen. John Glenn of Ohio would also gain strength. Glenn's candidacy never took off, and Mondale found himself in a desperate fight to hold off dark-horse Hart.

Maslin said that as the new front-runner, "Hart lacks the organizational and institutional strength that Mondale had in 1982-84 but he has already projected a message and a vision of a candidacy, as no other early front-runner since John F. Kennedy did."

On the other hand, Edward J. Rollins, manager of President Reagan's 1984 campaign, said he thought that "front-runner is not the best position for Hart. I don't think he's done that much organizationally, and he has enough flaws as a personality that three years of scrutiny will not necessarily help him. I'd guess the anybody-but-Hart campaign will start immediately."

Rollins said that from the Republican point-of-view, the main effect of Kennedy's withdrawal will be to "end our wishful thinking. It takes away the one candidate we were sure we could beat."