BOSTON, SEPT. 30 -- Massachusetts Gov. Michael S. Dukakis' high-flying bid for the Democratic presidential nomination was shaken to its core today by his admission that his campaign manager, John Sasso, had distributed the "attack videotape" that led to the withdrawal of Sen. Joseph R. Biden Jr. (D-Del.) from the race last week.

Only four hours after a grim-faced Dukakis said at a news conference that he had apologized to Biden but rejected Sasso's resignation this morning, he allowed both Sasso and his top deputy, campaign political director Paul Tully, to leave their jobs.

The dramatic developments, precipitated by reporters' investigations of the source of videotapes showing a Biden speech that used without attribution the language and theme of an autobiographical campaign speech by British Labor Party leader Neil Kinnock, threatened to further damage Democratic efforts to regain the White House. The party has already lost two candidates to scandal before any votes have been cast.

Political analysts disagreed on how badly Dukakis had been damaged by the day's events, but many agreed the party is suffering. "These soap operas have got to stop if we are going to take back the White House," said Geoffrey Garin, a Democratic pollster. {Details, Page A18.}

Just Tuesday night, Dukakis had celebrated his status as the top fund-raiser in the Democratic field by playing a trumpet solo and waltzing with his wife at a million-dollar party of Boston supporters.

Today he confronted a crisis that suddenly cost him the services of Sasso, the strategist who plotted his comeback to the governorship in 1982 and who was described by one longtime friend as virtually "Michael's brother, his right arm and the right lobe of his brain."

Intimates also expressed the fear that the incident may cloud the reputation for integrity and hands-on managerial competence that are the underpinnings of Dukakis' presidential candidacy.

In Iowa, the first state to select Democratic delegates -- Feb. 8 -- the reaction was particularly bitter. "We don't play that kind of politics out here," said John Roehrick, vice chairman of the state Democratic Party. Lowell Junkins, Biden's top supporter in Iowa and the party's 1986 gubernatorial candidate, said the revelation of the Dukakis campaign's complicity was "very serious for him here . . . he entered the race saying Democrats should stay united."

Junkins, echoing others, said, "The deed itself is almost insignificant. It is the way he handled it." The purpose of distributing the tape, Dukakis sources said, was to "brush him {Biden} back from the plate," not knock him out of the campaign. But the original tape became a major problem when it led to other revelations about Biden that the Dukakis camp says it knew nothing about.

Neither Dukakis nor any of his remaining top campaign aides sought to minimize the devastating effect of the developments -- reminiscent in some ways of the sudden revelations that forced former Colorado senator Gary Hart, the early front-runner, and Biden to abandon their candidacies.

As recently as Monday Dukakis seemed to have relied on assurances from Tully and Sasso in scoffing publicly at a Time magazine report linking his campaign to the "attack tapes." Sent to three news organizations, the tapes showed the nearly identical passages from the Kinnock commercial and Biden's closing statement at an August Democratic candidates' debate in Iowa.

Today, Dukakis walked frowning into the news conference at the State House and announced without prelude that "at 4 p.m. yesterday I had a visit from John Sasso who informed me he was the person who was responsible for supplying those tapes to The New York Times, the Des Moines Register and NBC News."

Dukakis said he had apologized by telephone to Biden for helping precipitate events that brought forth an instance of plagiarism by Biden in law school and exaggerations of his academic record. After extensive news media focus on the incidents, Biden ended his campaign on Sept. 23.

The governor said Sasso had offered his resignation yesterday but that he had rejected it after weighing overnight this "very, very serious error in judgment" against his seven-year association with "one of the most outstanding public servants I've ever known." He urged Sasso to take a two-week leave and return to the campaign, Dukakis said.

"Although I had no knowledge of this," the governor said, "I take full responsibility . . . and expect to be held accountable."

The decision to try to retain Sasso lasted four hours. When Sasso faced reporters at a midafternoon news conference, where he apologized for his "serious lack of judgment," he said he had pressed his resignation on Dukakis in a brief midday phone conversation and that this time the governor agreed "it would be best for the campaign."

Sasso said he also told Dukakis that Tully, recruited from Hart's staff after Hart was driven to the sidelines last May by reports of a relationship with a Miami model, also wanted to quit. Sasso said Tully had known the truth but told Time magazine no one in the Dukakis campaign was responsible for distributing the Biden-Kinnock tapes.

Leslie Dach, who had been scheduling director, temporarily took over heading the campaign. Dukakis is slated to return to campaigning in Iowa on Thursday.

The admissions today followed a Dukakis news conference on Monday where the governor said he had no knowledge of anyone in the campaign distributing the Biden-Kinnock tapes and that he would be "very, very angry" if anyone in the campaign had done so.

"Anybody who knows me and knows the kind of campaigns I run, knows how strongly I feel about negative campaigning. I make it very clear to my staff people, and I think they know what to expect of me and what I expect of them," he said.

In fact, however, Dukakis in his 1982 gubernatorial campaign demonstrated a readiness to attack his opponent, Gov. Edward J. King, sharply. Dukakis contended that Massachusetts residents had been forced to pay what amounted to a "corruption tax" during the King administration.

Dukakis had stressed in this campaign that Democrats needed to stick together and not attack one another. In July, he sent a letter to all other contenders explaining why he had asked for a two-man debate with Rep. Richard A. Gephardt (D-Mo.). Accusing Gephardt of distorting his record, Dukakis said in the letter, "I hope this will be the only time one of us feels the need to correct false and personal attacks."

Sasso, 40, joined forces with Dukakis after working in Sen. Edward M. Kennedy's (D-Mass.) bid for the 1980 Democratic nomination. He took command of Dukakis' drive to reverse the 1978 primary election upset that ended his first term as governor.

An incident during the 1982 primary also involved Sasso and tapes. An aide in the Dukakis campaign had obtained a tape of a King ad, which had not yet been broadcast, and altered it into a parody of the sex life of King and his wife, a polio victim. Sasso played the altered tape for Boston Globe reporters. When the incident became public and King attacked Dukakis, Sasso apologized. But he remained in charge of the hard-fought campaign and engineered Dukakis' narrow victory over King.

This time, according to Dukakis campaign insiders, the precipitating incident was a phone call to Sasso from Maureen Dowd, a reporter in the Washington bureau of The New York Times. After discussing other matters, Sasso remarked that he was surprised that no reporter had pointed out that Biden's "closer" in the Iowa debate, two weeks earlier, was borrowed without attribution from the Kinnock commercial, which a campaign consultant had played for him.

When Dowd asked whether Sasso could document the similarities, he said he could get tapes. And he walked out of his office into the adjoining press office and told a junior aide to prepare a tape, showing the borrowings. The assignment was carried out by an office intern.

Sasso said at his news conference today he did not consider it a "dirty trick" because both statements were in the public domain and "I did not distort them." But he also said that, even at the time, "I knew this was not consistent with the kind of campaign Michael Dukakis wanted to run."

Sasso took responsibility also for sending tapes to the Des Moines Register and NBC News, but others in the campaign said they believed he had responded only to the Dowd request and other aides, relying on his example, had sent similar tapes to the other two organizations. Sasso strongly denied broadcast reports that Teresa Vilmain, Dukakis' Iowa coordinator, or anyone else outside the national headquarters had a hand in the tapes' distribution. Vilmain, in Iowa, also denied any role.

The Times did not identify its source of information, but the Register wrote that the "attack tape" came from an unnamed Democratic campaign. The incident angered many Democrats outside the Biden camp because it embarrassed Biden, the Judiciary Committee's chairman, of the eve of hearings on the Supreme Court nomination of Judge Robert H. Bork.

Late last week, after Biden quit the presidential race, Patricia O'Brien, a former Knight-Ridder Washington correspondent who became Dukakis' campaign press secretary last spring, learned that Time magazine was preparing to identify the Dukakis campaign as the source of the tape in its forthcoming issue.

O'Brien, who had been bypassed by Sasso when he ordered the tape made by an intern on her staff, reportedly pressed aggressively for quick and full disclosure of whatever had happened and was given what she regarded as evasive answers.

Sasso said he informed Dukakis of the impending Time story on Sunday, the day of its publication. Both men said today that the governor urged him "to get on it and pursue it." Dukakis said he did not directly ask Sasso whether he had a role in the tapes, considering such a possibility "unthinkable."

At a Monday news conference here, Dukakis said he would be "very astonished" if the tapes had originated in his campaign, because he had personally instructed all staff members about "how strongly I feel about negative campaigning." He added that he could not absolutely rule out that "an ally or a volunteer" might have done it on his own.

Over the weekend, sources supporting Dukakis told The Washington Post that grave misgivings were being expressed inside the campaign about its possible complicity in the tapes incident. Dukakis sources said numerous news organizations were making inquiries of a similar nature.

When The Post checked its reports with Sasso on Monday, he said he was not going to comment because there were "millions of rumors." That afternoon, when O'Brien asked Sasso to listen to a tape of Dukakis' news conference, he became "much more depressed and concerned," sources said. By Tuesday, The Post had learned enough specifics -- including the instruction from Sasso to an intern -- that a Post reporter came to Boston to confront the campaign directly. Other news organizations also continued their efforts. When there were more denials from Sasso and others, The Post withheld the story.

But in the same period on Tuesday afternoon, Sasso reached the decision that the situation was untenable, prepared a letter of resignation and went to the State House to inform the governor what he had done.

The reason he delayed that long, Sasso said today, was that "I knew it would hurt him and as soon as I told him, he would want to make it public and we would reach the point {of resignation} we're at today."

In fact, Dukakis absorbed the news and then went through the evening fund-raising event, clowning with the orchestra and seemingly celebrating the political and financial success of his campaign.

When he got home, he conferred with Sasso and others by phone and told them he would make a statement, acknowledging the campaign's actions, this morning.

It was not until they met with the governor at the State House this morning that Sasso, Tully, O'Brien and gubernatorial press secretary Jim Dorsey learned that Dukakis was going to reject the Sasso resignation. There was some debate about the wisdom of that course, those present said, but the governor appeared determined.

However, when they were back at the campaign office after Dukakis' news conference, Sasso told the other aides that the governor would be plagued by questions about the tapes as long as those responsible remained in charge of his campaign. He called Dukakis and asked him to "accept the inevitable," and this time, Dukakis agreed. Tully also quit, saying in a written statement that he had given "misleading" information to Time, adding "I am ashamed of myself for letting Gov. and Mrs. Dukakis down."