While Gen. Manuel Antonio Noriega, Panama's military strongman, is facing his biggest political crisis at home, two federal grand juries in Florida are investigating whether Noriega is linked to the multibillion-dollar Latin American narcotics trade.

The investigations coincide with the growing sentiment within the Reagan administration and Congress that Noriega's continued dominance of the Panamanian government is unacceptable and that his departure from power is essential to restoring Panama's political stability.

In the aftermath this summer of anti-Noriega riots, which have given rise to the most sustained, organized opposition to him, the administration suspended military and economic aid to Panama. "We want {Noriega} to go" and for Panama to enter the "path to real democracy," said a State Department official involved in the policy.

U.S. law enforcement officials bristle at any suggestion that the criminal investigations of Noriega are part of an administration strategy to force him out, but they agree that the new chill in official relations with Noriega, a longtime U.S. ally, has made it easier to investigate him. "Now the time is ripe," said one law enforcement official.

The investigations are focusing on information from three convicted drug smugglers who have told federal authorities of alleged payoffs to Noriega, including some payments from a major international drug cartel, to provide protection for drug loads shipped through Panama to the United States, according to informed sources.

Allegations of Noriega's involvement in illegal drug trafficking first surfaced 15 years ago, and he has repeatedly denounced them. He has called the latest allegations part of a campaign by some U.S. officials to regain control of the Panama Canal.

In the past few months, federal grand juries in Miami and Tampa, Fla., have begun separate investigations into the allegations. The Miami investigation is being conducted by the Drug Enforcement Administration (DEA) in conjunction with the U.S. attorney's office there. In Tampa, the FBI and the U.S. Customs Service are involved along with the U.S. attorney's office in that city.

Officials caution that the investigations face numerous hurdles, from the credibility of the chief witnesses, who are convicted criminals, to the legal status of Noriega, strongman in a country whose constitution forbids the extradition of Panamanian citizens. The United States is also in the awkward position of investigating whether there is criminal evidence against the powerful leader of a country vital to U.S. interests in Latin America.

The influential head of Panama's military intelligence service for 13 years before becoming armed forces commander-in-chief in August 1983, Noriega exercises virtually unchallenged control over the civilian government, including President Eric Arturo Delvalle.

As commander of the 15,000-member Panamanian military, called the Defense Forces, Noriega's official authority extends far beyond traditional defense duties. The Panamanian Defense Forces hold extraordinary power over basic state functions: they run the police, the airports, harbors, prisons and immigration, and even issue passports and visas.

Site of the strategically important Panama Canal and the largest U.S. military base in Latin America, Panama has received more than $150 million in U.S. military and economic aid in the past four years.

But Panama has another role in Latin America: ever since the early 1980s, when the Reagan administration launched a broad assault on the international narcotics trade, Panama's importance has grown in the illegal drug-trafficking business, according to U.S. law enforcement officials.

Its location between South America and the United States makes it a convenient refueling point for drug smugglers flying north. But more significantly, say U.S. officials, when federal agents clamped down on the flow of illicit drug profits into U.S. banks, Panama's bank secrecy laws, among the tightest in the Western Hemisphere, turned it into a major money laundering center, particularly for illegal cocaine profits.

Federal officials say that fortunes in illegal drug cash -- much of it in small bills stuffed into suitcases and cartons -- ended up in Panamanian banks, where armored trucks were sometimes hired to transport the money from the airport to the banks.

"Pamana has become the world capital for cocaine money laundering," said Al Coward, the DEA's chief of financial intelligence. "The vast majority of money collected from Colombian cocaine sales in the United States, at some point was going back through Panama."

For example, when federal agents stopped a Learjet bound for Panama at Fort Lauderdale International Airport in May 1983, they found $5.4 million inside 20 custom-made boxes. The jet was owned by a Miami accountant who was subsequently convicted of laundering mostly cocaine profits. Records seized from his operation showed that during one eight-month period, he had shipped nearly $150 million in drug profits to Panamanian banks.

Federal law enforcement officials said that most of the cocaine profits that pass through Panamanian banks belongs to a notorious confederation of Colombian drug kings known as the Medellin cartel, which derives its name from a Colombian industrial city in the heart of the narcotics trade. Officials said that the Medellin cartel has made billions of dollars from its U.S. sales and is responsible for 75 percent of the cocaine smuggled into this country.

In connection with a federal indictment last year in Miami of alleged cartel leaders, prosecutors told the news media that the group smuggled nearly 60 tons of cocaine into the United States during a four-year period. Today, that amount of cocaine would be worth nearly $700 million in Miami's wholesale drug market.

One witness in the Miami probe of Noriega has linked the cartel to alleged payoffs to Noriega and has told investigators that the group made the payments to buy protection for drug shipments that moved through Panama to the United States, knowledgeable sources said. The witness, a convicted drug smuggler, has alleged he was an intermediary in about $1 million of the payments, sources said.

Another convicted drug dealer cooperating in the Miami investigation has told authorities that he also participated as a conduit in a drug-related payoff allegedly made to Noriega, according to a source familiar with this account.

Maj. Edgardo Lopez, a Noriega spokesman, in a recent telephone interview from Panama City called the drug-smuggling allegations against Noriega "lies and fantasies" of convicted criminals who have no credibility.

"Nobody is able to hide this kind of connection and relationship with the Medellin cartel," Lopez said. "Please, it makes us laugh. It's completely crazy."

After the Miami Herald disclosed in an article that federal prosecutors were investigating alleged bribes to Noriega from the Medellin cartel, Noriega telephoned the newspaper. The Herald reported that Noriega scoffed at the report, and said "the ruler of a country doesn't have a price of a million dollars."

Noriega was also quoted as saying that the investigation was part of a campaign by some U.S. officials to "discredit Panama and discredit its leadership" in order to roll back 1977 treaties that transfer control over the Panama Canal from the United States to Panama in the year 2000.

In the Tampa investigation, another witness -- also a convicted drug smuggler -- has alleged that he met with Noriega to discuss the general's "cut" from profits derived from drug shipments, sources said. The witness has also told investigators of a company tied to at least one Noriega associate that may have been used to funnel payoffs to Noriega, sources said.

Sources said the witness has linked to the alleged scheme another man identified as a Noriega associate, Cesar Rodriguez Contreras. Rodriguez, a suspected drug pilot, was murdered in Colombia in 1986 in what U.S. officials believe was a drug-related killing.

Maj. Lopez said Rodriguez was a well-known jet-set figure in Panama, but "as far as I know he did not have any relationship with Gen. Noriega."

Bank records obtained in Panama show that Rodriguez and a business partner had a company that brokered aircraft to Panamanian government agencies after leasing them from private U.S. firms.

In a telephone interview, Walter Conlogue, a North Carolina airplane broker involved in some of the leasing deals, said that Rodriguez and his business partner once introduced him to Noriega when the general was passing through the Fort Lauderdale airport on his way to Washington.

Lopez said that Noriega and other Panamanian officials are weary of the continued barrage of allegations against Noriega. "Why doesn't somebody prove what they are saying?" Lopez asked.

U.S. Customs Commissioner William von Raab said that investigatory efforts are hampered by the compartmentalized, tight-knit nature of the Panamanian military, which other officials referred to as a kind of "corporate Mafia."

"Any man who surrounds himself with military protection is always going to be difficult to make a case against because of the layers of insulation that he has," said von Raab, an outspoken Noriega critic. But, he added, "I think it is just a matter of time" before the veil is pierced. "That's not a promise. It's just my personal opinion."

Lopez said that, contrary to what critics say, Panama has cooperated fully with U.S. authorities in combating international drug trafficking. "We really fight like hell with all our weapons," Lopez said, adding that over the years top U.S. law enforcement officials have written letters praising Panama for its help.

"We are the United States' best partner in the fight against drug consumption and drug smuggling," Lopez said. And "we are going to remain your best partners."

Among the U.S. officials who have praised Panama's antidrug efforts are Attorney General Edwin Meese III and top DEA officials.

U.S. officials note that, in response to requests from the United States, Panama last year made drug money-laundering a crime in that country. The new law also gives U.S. law enforcement officials, under certain circumstances, access to secret Panamanian bank accounts tied to drug trafficking.

DEA's Coward said the new Panamanian law proved effective in a major DEA money-laundering investigation, dubbed "Operation Pisces," in which the Panamanians at DEA's request froze $14 million in 54 accounts at 18 banks.

"The results are unprecedented," Meese said at a news conference on the investigation earlier this year. Carlos Villalaz, Panama's attorney general, joined Meese at the session and said "Operation Pisces is proof of what we've been doing. In Panama, we don't talk. We do. We act."

However, Noriega's critics argue that Panamanian cooperation is primarily done for public relations reasons. These critics, who include U.S. congressmen and Panamanian opponents of Noriega, say his cooperation with U.S. authorities in some cases deflects attention from his alleged drug activities.

Von Rabb, whose agency has a major role in combating drug-smuggling into the United States as well as the flow of drug profits overseas, said he remains unimpressed with Panama's cooperation.

"In Panama you still have a situation in which they cooperate with us on a selected basis," von Raab said. "They will cooperate with us if it doesn't affect any of the friends of the regime. They certainly will cooperate with us if they can improve their image."

Noriega, who is 5 feet 5 and is known to friends as "Tony," is described as a shrewd, cunning leader who has proven adept at ingratiating himself with both the United States and communist Cuba.

While serving as head of the military intelligence service, known as the G-2, Noriega had control over Panama's secret police and developed close working relationships with U.S. intelligence agencies as well as with the Cubans. William J. Jorden, a former U.S. ambassador to Panama, told ABC's "Nightline" earlier this year that Noriega has been on the CIA payroll for years.

"He's nonideological and a total opportunist," said a Defense Department official.

Noriega enjoys a comfortable life style, which includes frequent trips to Paris, and, according to Panamanian sources, has the use of several homes in different parts of Panama. He likes expensive art works and is known for his collection of miniature toy frogs. In Panamanian slang, a sapo, or frog, is a government informer.

Noriega rose to power as a top aide to Brig. Gen. Omar Torrijos Herrera, the charismatic Panamanian leader who negotiated the Panama Canal treaties with the United States. Torrijos died in a plane crash in 1981.

Although Noriega lacks the personal magnetism of Torrijos, "very little happens in Panama without Gen. Noriega being involved in it or at least knowing about it," said one State Department official.

But State Department officials view the growth of the political opposition in Panama as a sign that Noriega's rule may be in jeopardy.

The recent round of protests erupted after a onetime top aide to Noriega, former colonel Roberto Diaz Herrera, who had been forced into retirement, publicly accused Noriega of rigging the 1984 presidential elections to insure the victory of a candidate backed by the military and of masterminding the 1985 assassination of a leading Noriega critic, Hugo Spadafora.

Diaz Herrera also cited Noriega's alleged drug involvement and told reporters that "Noriega has got massive amounts of money from the drug business."

While the allegations were not new, State Department officials believe Diaz Herrera's statements are an important crack in the military's code of silence.

"Diaz Herrera is really a Joe Valachi-like figure," said a State Department official, referring to one of the first Mafia figures to break the underworld code of silence and become a government informant.

Diaz Herrera, who has been described by the Panamanian government as "mentally unstable," was arrested in Panama shortly after he spoke out and remains in custody.

Diaz Herrera's charges of systematic corruption within the military are consistent with the past conclusions of knowledgeable U.S. diplomats and congressional studies.

A 1985 staff report on overseas narcotics control by the House Foreign Affairs Committee noted that "corruption continues to be one of the biggest obstacles to effective antinarcotics action in Panama."

"As one knowledgeable U.S. source put it, 'the Panamanian Defense Force is the axle around which the wheel of corruption turns.' This corruption is endemic and institutionalized," the report said.

A February 1983 staff study on money laundering by the Senate permanent subcommittee on investigations reached similar conclusions. "The {military}, the staff was assured, provides warehousing for narcotics on their way north, assures the release, for bribes received, of drug traffickers arrested, {and} guarantees the nonarrest of offenders wanted elsewhere who have paid a kind of local 'safe-conduct' fee . . . , " the report said.

Allegations of Noriega's drug involvement have come up several times over the years. For example, in 1972, according to a source, senior U.S. drug officials passed information about Noriega to Torrijos, his mentor, who promised to look into the matter. In 1978, allegations on Noriega's drug activities resurfaced during the Senate's consideration of the Panama Canal treaties.

In a Senate speech last April, Sen. Jesse Helms (R-N.C.), who has repeatedly accused Noriega of involvement in drug trafficking, cited the case of a former Panamanian lieutenant colonel named Julian Melo, who was fired from the Panamanian military but never prosecuted after he was linked to drug trafficking. Helms said that the U.S. Customs Service has found that Melo received more than $2 million for protecting "illegal narcotics operations in Panama," but Melo continues to live "openly in comfortable retirement in Panama."

In the last year, two men identified by U.S. and Panamanian sources as former pilots for Noriega were convicted in federal court in Miami on charges related to smuggling nearly 3,000 pounds of cocaine from Colombia to the United States.

According to court papers filed by prosecutors, one of the convicted pilots was the ringleader of the smuggling operation and had "direct contact with the Colombian sources of supply."

Noriega's possible involvement with the drug-smuggling operations' two pilots is now under investigation.