Rep. Lee H. Hamilton (D-Ind.), chairman of the House committee investigating the Iran-contra affair, said yesterday that if it is determined that President Reagan approved the diversion of funds to Nicaraguan rebels, there would be a "demand for impeachment proceedings."

"If that occurred -- and let us emphasize the 'if' -- that if it occurred, you would have a demand for impeachment proceedings," Hamilton said on ABC News' "This Week With David Brinkley."

Hamilton is the first member of the House or Senate panels to raise even the possibility of such a serious step.

Committee investigators and independent counsel Lawrence E. Walsh are concentrating on an undated April 1986 memorandum found in the files of Lt. Col. Oliver L. North that proposed diverting $12 million in profits from the sale of arms to Iran to aid the rebels, known as contras. The memo, which called for a presidential decision, had no cover sheet and investigators are attempting to determine if its contents reached the president.

Reagan has denied any knowledge of the diversion of proceeds from the arms sale to aid the contras. While he has retreated from earlier denials about other aspects of the secret arms sale, he has not retreated on his denial of knowledge of diversion to the contras, and no link has been established.

"If that memo had reached the hands of the president and he had approved it, that would be the smoking gun referred to a moment ago," Hamilton said, "and I think it would be a very serious matter for Congress."

Hamilton noted that while the committee members have seen the document in question, "we don't know whether it got to {Reagan} or not."

Committee investigators are interrogating former national security adviser John M. Poindexter under tight security. North's secretary, Fawn Hall, testified last week that the memo had gone to Rear Adm. Poindexter, who had sent it back for revision with suggested changes. According to the Tower commission appointed by Reagan to investigate the affair, North drafted the memo at Poindexter's request. Poindexter's testimony before the full commmittee is scheduled to begin July 7.

Hamilton appeared on the ABC show with two other members of the Iran-contra panel, Sen. George J. Mitchell (D-Maine) and Rep. Henry J. Hyde (R-Ill.).

Mitchell said that the president "already has been hurt very badly" by what has emerged during the first six weeks of the congressional hearings, which concluded last week.

"I don't think the president will ever regain the status he had prior to last November's election, but he still can be an effective force

under certain circumstances," he said.

Hyde said he agreed: "He is indeed a lame duck and I'd hate to have the last memory of the Reagan administration, the two of them, be this Iran-contra controversy because it's nothing anyone can be proud of."