A caption that accompanied five photos from the Iran-Contra hearings on Page A12 yesterday incorrectly identified the book from which Rep. Henry J. Hyde (R-Ill.) quoted, "Breaking Cover," as a novel. It is non-fiction.

Former national security adviser John M. Poindexter reiterated his belief yesterday that President Reagan would have approved the scheme to divert proceeds from U.S.-Iran arms sales to help the Nicaraguan contras, and described White House statements to the contrary as predictable.

Poindexter questioned whether White House spokesman Marlin Fitzwater was speaking for Reagan when he declared Thursday that the diversion "wouldn't have happened" if Reagan had been told of the plan. His statement drew him into an escalating dispute with the White House he once served.

In three days of testimony before the Iran-contra congressional committees, Poindexter has said that he decided not to tell Reagan about the diversion to give the president "plausible deniability" if the operation was exposed. Fitzwater said Thursday that officials who do not seek presidential approval for important decisions do a "disservice" to Reagan.

Asked yesterday about Fitzwater's statements Poindexter said, "I understand that he said that, and I would have expected him to say that. That's the whole idea of deniability."

Poindexter faced a continued attack yesterday on his credibility and on the plausibility of the account he has given. The Navy rear admiral, who often puffed on his pipe as he carefully crafted his answers, repeatedly drew a distinction between "withholding" information and lying to Congress.

He also attempted to distance himself from some of the questionable actions taken by his former subordinate, Lt. Col. Oliver L. North; took a pot shot at the State Department for its "overreaction" to the disclosures about the Iran arms sales, and declared that he probably should not have resigned as soon as he did while the Iran-contra operations were coming unraveled last November.

In reference to the destruction of relevant White House documents by himself and others he declared, "I don't have any problem with it." Regarding the withholding of information from Cabinet members, he said, "I didn't withhold anything from them that they didn't want withheld from them."

Commenting on Poindexter's withholding of information from the president, Cabinet, Congress and subordinates, Sen. Daniel K. Inouye (D-Hawaii), chairman of the Senate panel, said it was not "improper for any member of this panel to characterize {Poindexter's} testimony as being incredible, mindboggling, chilling."

Outside the committee room, Inouye disclosed that the Senate and House panels are discussing whether to cut off the hearings in two weeks, which could mean that some major witnesses will not testify publicly.

Yesterday, the most dramatic testimony dealt with Poindexter's apparent conflict with the White House. When Sen. Sam Nunn (D-Ga.) asked Poindexter if he believed Fitzwater was speaking for the president, Poindexter replied, "I would want to have a conversation with the president, which I have not had, and which would not be appropriate at this time."

"Well, if Marlin Fitzwater really was speaking for the president, would you agree that those statements {that Reagan would not have approved a diversion} are, in your opinion, misleading the American people?" Nunn asked.

Poindexter responded, "I felt that the president would approve that {diversion scheme} if I had asked him. I still feel that way . . . . At this point I can't speak for the White House. I don't know what they've got in mind over there."

Later in the day, White House chief of staff Howard H. Baker Jr. kept the controversy alive with still another statement: "The president has said repeatedly that he did not know about the diversion of funds, and if he had he known about it, he simply would have stopped it. That is the record."

While members of the president's staff have said the president would not have authorized the diversion, Reagan has never been addressed that question publicly. He was asked at his March 19 news conference if he could have forgotten being told about the diversion. He replied, "Oh, no, you would have heard me from -- without opening the door to the office -- if I had been told that at any time."

In testimony this week, Poindexter described a far more muted reaction from the president and his top aides last November when the attorney general's staff discovered a memo at the National Security Council that mentioned the diversion.

In his final meeting with Reagan to offer his resignation -- the single occasion that Poindexter recalled ever mentioning the diversion to the president -- Reagan did not question him about the diversion, Poindexter said. Instead, the president said only that he had a "great regret" and that the resignation was "in the tradition of a naval officer of accepting responsibility."

With Poindexter facing only two more days of questioning next week, and North's testimony completed, the congressional panels have begun to argue among themselves about the duration of the final phase of the investigation and which high level administration officials should be called.

At a breakfast with reporters yesterday, Sens. Inouye and Warren B. Rudman (R-N.H.), chairman and vice chairman of the Senate select committee, said they may favor ending the public hearings in two weeks and limiting the remaining witnesses to Attorney General Edwin Meese III, former White House chief of staff Donald T. Regan, Secretary of State George P. Shultz and Defense Secretary Caspar W. Weinberger.

Under this proposed schedule, the committees would release depositions from other key witnesses the first week of August, which had originally been set aside for public hearings. The plan would eliminate several witnesses from public testimony. Included in this group are two Central Intelligence Agency senior officials, Deputy Director Robert M. Gates and Duane Clarridge; former Federal Bureau of Investigation director and currently CIA director William H. Webster, and Donald P. Gregg, national security adviser to Vice President Bush. {Clarridge and another CIA official will be asked to resign or retire. Details on Page A15.}

The pressure to wind down the public hearings, which began May 5, has been coming chiefly from Republicans, who have argued that Poindexter's testimony has answered the last few big questions, particularly Reagan's knowledge about the diversion.

House Democrats, in particular, are pressing to continue the public seesions long enough to question some CIA witnesses in public. And the Democrats, as well as some Republicans, want to address some of the institutional problems that they feel have been uncovered.

Rep. Henry J. Hyde (R-Ill.), a conservative who has defended the Reagan administration throughout the hearings, said yesterday as he began his questioning of Poindexter that he found it "very difficult to defend the lies and the deception" of Congress uncovered by the investigation.

Hyde also criticized Poindexter on several counts. Last November, he said, Poindexter told him and others that all the U.S. weapons involved could fit on a single aircraft. Hyde said he used this information to defend the transactions, suggesting that the press was blowing the issue out of proportion.

Now, he said, "I'm told that if they could ever find the plane that those could fit in, it would never fly."

Hyde also complained that Poindexter, in the Iran-contra affair, had made "a political decision that raised questions of political competency, competency to govern, the question as to who's in charge that produced a political calamity, not just for you and for Col. North and Mr. {Robert C.} McFarlane, but the president and our party as well."

The result, he said, "has been the throwing of raw meat to the Reagan haters . . . . "

This criticism of the actions inside the Reagan administration came a week after Republicans on the committee received a strong morale boost from the testimony and demeanor of Poindexter's former aide North.

The tremendous outpouring of public support for North during his nationally televised testimony has created tensions inside the House and Senate panels, and has resulted in criticism of House majority counsel John W. Nields Jr., who conducted the initial two-day interrogation of North. Yesterday Rudman took those views public when he told reporters Nields was too confrontational at the start of North's appearance, which created sympathy for the Marine.

Nields declined to comment.

Although Inouye said yesterday the committees would continue using staff lawyers to open the questioning of Cabinet-level officials, they will be sharply limited in the time they will have.

Some of yesterday's hearing revolved around the memory of Poindexter, a Navy rear admiral who was once praised as an officer of "spectacular mental capacity" by his boss in 1978, Chief of Naval Operations Adm. James L. Holloway. In a report, read into the committee record by Nunn, Holloway described Poindexter as someone who "retains fully, recalls accurately."

Asked yesterday about Holloway's description, Poindexter called it "a little bit elaborate." During three days of testimony thus far, his memory of key events and conversations has been spotty, and he has sometimes answered questions by saying simply, "I don't recall."

At different points yesterday, Poindexter said that for almost a year he had forgotten that the president had signed an intelligence "finding" on Dec. 5, 1985, that belatedly authorized U.S. involvement in a November 1985 arms shipment to Iran, and that he had forgotten his role in that shipment.

Poindexter also said he could not recall receiving five memos outlining proposed arms shipments and mentioning that the shipments would produce proceeds that could be diverted. North testified that he sent these memos to Poindexter in 1986. Nor could he recall two other key incidents described by North: Telling North in February 1986 that the president had approved the diversion plan, or answering North's question last Nov. 21 to the effect that the president had not been informed about the diversion.

A large segment of Nields' questioning of Poindexter yesterday morning focused on what guidelines Poindexter gave North when members of the House Permanent Select Committee on Intelligence came to the White House last summer to question North about his activities in support of the Nicaraguan rebels.

The meeting was prompted by a spate of news reports that said North was acting as a White House coordinator in secretly aiding the contras during the period when the so-called Boland Amendments prohibited direct U.S. military aid to the rebels. During his testimony last week, North said he lied at the meeting about his activities.

Poindexter testified yesterday he did not authorize North to make false statements, but "did think he would withhold information and be evasive, frankly, in answering questions. My objective all along was to withhold from the Congress what the NSC staff was doing in carrying out the president's policy."

Pressed by Nields to acknowledge that this placed North in an "impossible" position with the congressional members, Poindexter said he was convinced that "with his resourcefulness, I thought {North} could handle it," and added he still was not convinced North had lied.

He also said flatly that he believed the Boland Amendment did not apply to the NSC staff, although he conceded under questioning by Rudman that he made no effort to seek a formal legal opinion.

Poindexter took the position on several occasions that the Iran-contra affair had been blown out of proportion. The main culprit was the media, which he said had printed "rather outrageous stories." Poindexter also blamed the State Department for "overreaction." After the arms sales became public last November, he said, "We got a lot of carping and criticism from officials of the State Department, primarily, in my view, because they didn't understand what we were trying to do."

This was an apparent reference to criticism of the transactions by Secretary of State Shultz, who had initially opposed the covert operation and whose opposition was described by aides to reporters in early November.

Poindexter also said it was by Shultz's choice that the secretary of state was kept uninformed about details of the operation.