CLEVELAND, AUG. 31 -- Allen Friedman, a key witness against Teamsters President Jackie Presser, his nephew, has recanted his testimony, blaming medication and government agents for statements by Friedman supporting charges of a payroll-padding scheme.

Friedman told an administrative law judge that Labor Department agents fabricated a story that he agreed to be paid $1,000 a week for life without doing work if he would merge his Teamsters Local 752 with Presser's Local 507 in Cleveland in 1977.

A transcript of Friedman's sworn testimony on Oct. 7, 1986, was included in documents filed recently in federal court by lawyers representing Local 507 officers Presser, Harold Friedman and Anthony Hughes in an embezzlement and labor racketeering case. Presser has been international president of the union since 1983.

Allen Friedman, who has had several heart attacks, said he was a consultant for the local and was told only not to work when sick, The Plain Dealer reported Sunday.

Allen Friedman's testimony concerned his attempts to obtain Social Security benefits, the Cleveland newspaper said. He and Harold Friedman are not related.

At the hearing, Allen Friedman testified that former Labor Department agent James F. Thomas made up a story about the alleged "ghost employe" deal. He also said any statements that he was paid while doing no work were made while he was under the influence of Valium, a tranquilizer.

Allen Friedman was convicted in 1983 on federal embezzlement charges.