A highly public lobbying campaign for military aid to anti-Sandinista rebels by the Friends of the Democratic Center in Central America (Prodemca) provoked anxiety among the editors of La Prensa, the opposition newspaper in Nicaragua, over receiving U.S. government money passed through the group. Eventually, a less controversial conduit was found to replace Prodemca.

The National Endowment for Democracy (NED), which provided the money to Prodemca, has been the subject of contention since its founding in 1983 because of its taxpayer-funded grants to organizations involved in the internal politics of foreign countries.

On March 7, the NED board voted to "cease funding La Prensa through Prodemca," according to Sally Shelton Colby, a NED board member and Bankers Trust vice president.

"La Prensa indicated that in view of this step Prodemca's lobbying that it might create difficulties for La Prensa," said Mark Plattner, program director for NED. "Prodemca would be identified with the contras. This would be associated with La Prensa. And this would be used by the Sandinistas to discredit La Prensa."

"La Prensa did not say they would be jeopardized by what we were doing," said Penn Kemble, a member of Prodemca's executive committee. "They felt there was a possibility this would be raised, the problem of the stand we were taking. They were in a difficult situation."

Plattner said: "There was unease that Prodemca was publicly going to be endorsing military assistance. . . and that Prodemca would continue to be the grantee for La Prensa."

Two other NED grants channeled by Prodemca to Nicaraguan groups, the Permanent Commission on Human Rights and the Democratic Study Center, have been continued. These groups were "willing to take the funds even though Prodemca was lobbying," said a source close to NED. In any case, the source emphasized, the NED "cannot legally break the relationship between Prodemca and the other two groups because we have a contractual relationship -- unless Prodemca and the recipients agree to terminate it."

The NED issued a statement Wednesday criticizing as "unfair and misleading" a story in The Washington Post that reported the NED grants to Prodemca and the Prodemca lobbying campaign.

"Endowment assistance has enabled La Prensa. . . to obtain the essential supplies it needs to continue publishing," said the NED statement. ". . . The Endowment is also proud of the vital role that Prodemca has played in helping to administer this assistance. . . . "

The NED statement was approved by its chairman, John Richardson, but not by its board.

"I just don't think we should be working with a group that is lobbying on an issue so central to the grant they are handling," said board member Colby.

Rep. Daniel A. Mica (D-Fla.), chairman of the international operations subcommittee of the House Foreign Affairs Committee, which oversees NED, requested yesterday that the United States Information Agency, under whose aegis NED exists, audit the Prodemca grants.

Prodemca's decision to lobby for military assistance to Nicaraguan rebels, also known as contras or counterrevolutionaries, was not unanimously approved by its national council. The Rev. Theodore M. Hesburgh, president of Notre Dame University and a council member, refused to sign the Prodemca newspaper ads. "I think the military solution is a long endless road -- more violence, more destruction, more lives lost," he said.

"I can understand why some people feel that we should not have done what we did," Kemble said. But he added: "It is a wise thing for the endowment. . . to give funds to groups which are engaged in very controversial things in this country, even in public policy."