The congressional Iran-contra committees singled out Attorney General Edwin Meese III for harsh criticism in their majority report yesterday, suggesting that Meese approved a possibly illegal effort to use private funds to ransom U.S. hostages in Lebanon.

The report also sharply rebuked Meese for his performance as the president's legal adviser, for the way he conducted an inquiry into the Iran arms sales a year ago this month after the sales became public and for delaying the release of information to the investigating panels.

Several times, the report pointed out that Meese's testimony either directly was in conflict with other testimony or that Meese could not remember key details about his actions that other witnesses recalled.

Part of the conflicting testimony involved Meese's role in authorizing agents from the Drug Enforcement Administration, acting under the direction of Lt. Col. Oliver L. North at the National Security Council, to pay Lebanese informers to ransom U.S. hostages.

The agents paid more than $400,000 to the informers over a two-year period in three unsuccessful operations to free the hostages being held in Lebanon. The North plan called for even larger amounts to be spent if the informers could arrange release of the hostages through bribes to the guards holding them or ransom paid indirectly to the captors, the report said.

North raised the money to finance these operations primarily from Texas billionaire H. Ross Perot, but some came out of the private contributions originally made to help the Nicaraguan contra rebels, another of North's "accounts" at the NSC.

No one in the Reagan administration told Congress of this covert operation and there was no presidential "finding" to authorize the DEA agents to undertake it. In one of the most unequivocal statements in the report, the House and Senate committees said that the "failure to notify Congress of the DEA covert operation violated the law."

The report noted that Meese had testified that he was unaware of a "plan to use private funds to ransom people in foreign countries." But the report noted that North and former national security adviser Robert C. McFarlane had said that the attorney general knew of the operation and had approved the use of private contributions.

North testified that he told Meese where the money was coming from and the attorney general told him "we couldn't use U.S. government monies for those purposes {but} we could use outside monies."

Meese, according to the report, testified that "he could not recall addressing the issue of using appropriated or unappropriated funds to conduct the activity."

DEA Administrator John C. Lawn gave conflicting testimony to the committees concerning what he knew about the use of private monies. First questioned about it, he told the committees that he never learned that money from private donors would be paid to try to win the release of the hostages. Later, he was shown his handwritten notes of a briefing with one of the DEA agents involved in the project. The note said, "Donor money, not CIA" and "contact with donor."

Lawn said, "Obviously I was told that there was donor money . . . . I don't recall hearing that. I don't recall recording that. But this obviously is my handwriting."

Yesterday at the Justice Department, a spokesman for Meese said the attorney general had no comment on the report and stood by his testimony as described in the report.

Meese, who spent four hours yesterday before the federal grand jury that is investigating the Iran-contra affair under the guidance of independent counsel Lawrence E. Walsh, also drew criticism in the report for failing to consult with his own staff at the Justice Department before offering critical advice about the legality of the Iran arms sales in early 1986.

He was particularly criticized for advising President Reagan that he did not have to notify Congress about the covert arms sales.

The report noted that Meese relied on an earlier decision by his predecessor, William French Smith, to justify selling arms secretly through the Central Intelligence Agency under an intelligence authorization. But the committees also pointed out that Smith, in giving that opinion, "explicitly stated that the president should notify the {congressional} intelligence committees before the arms were actually exported."

"There is only one reason to have an attorney general on the National Security Council," the report stated, "to give the president independent and sound advice. That did not happen in the Iran affair, and the president was poorly served."

The report also noted other cases in which Meese's testimony did not square with statements of other witnesses.

Secretary of State George P. Shultz testified that he told Meese on Nov. 22, 1986, that he was concerned about a possible "overlapping" of the Iran and contra operations. This occurred before Meese made the diversion public.

Meese, however, denied Shultz had said that; instead, he suggested the prospect of a diversion had come up in a later conversation with Shultz's assistant.

The committees, however, said they confirmed the secretary's version as presented to the panels. "Secretary Shultz's version is corroborated by {his assistant's} contemporaneous notes of Shultz's interview with Meese," the report said.

In another example, the report said that Meese had told the Tower special review board, a presidential panel that investigated the NSC role in the Iran-contra affair earlier this year, that he did not request briefings on the Justice Department's criminal investigation that was begun last Nov. 26 after disclosure of the diversion of arms sales funds to the contras because he believed the case would be going to an independent counsel.

His special assistant, John Richardson, was reported instructing the prosecution group that "if anything came up that was 'hot,' they were to tell the attorney general immediately."

The committees also said "a cloud" hangs over Meese's handling of his November 1986 weekend inquiry into the November 1985 Israeli shipment of U.S.-made Hawk antiaircraft missiles. It said that after Meese received information from North on Nov. 23 about the diversion, he stopped having an assistant accompany him during interviews and limited his questioning of top Reagan aides and Cabinet members to a few minutes.

Meese was also questioned about his decision to leave attorneys from his public integrity section out of that inquiry. That section was already looking into activities of North and former national security adviser John M. Poindexter because of a congressional resolution calling for an independent counsel to investigate their alleged support of the Nicaraguan contras at a time it was banned by Congress.

Four House committee chairmen wrote additional views that criticized Meese and his department for holding back on materials requested for the inquiry.

Complete versions of Meese's logs and calendars were only made available to the House investigators within eleven days of his July 28 scheduled appearance although they had been requested initially on Jan. 20, and hearings had begun in early May, they said.

These included key telephone calls that Meese made over the Nov. 22-23, 1986, weekend of his investigation and during the following days when the North-Poindexter diversion was being discussed, the chairmen said.

Just four days before Meese's testimony before the committee, they added, the Justice Department produced another "2-foot-high stack of documents" that had been requested much earlier.

The four chairmen also criticized Meese for his failure to answer questions posed to him during lengthy private depositions taken before his public testimony. They said, "He responded that he did not know, could not remember, did not recall, had no recollection, or some similar formulation some 340 times."

It was not until last month, the chairmen said, that the Justice Department turned over DEA documents that had been sought, and then did not advise the investigators that they were mostly in Spanish so they could not be read without a translator.

The report's description of the several attempts by DEA agents to free the American hostages during 1985 and 1986 added a new dimension to the Iran-contra affair.

Two seasoned DEA agents were brought to North's attention in early 1985 because they had contacts in the Middle East who might be able to locate William Buckley, the CIA station chief in Beirut who had been kidnaped in March 1984.

The agents, with the approval of Meese and then-DEA Director Francis (Bud) Mullen, were assigned to a White House hostage task force to try to develop information. In March 1985, they told North that a $50,000 payment to one source might lead the way to freeing hostages at a cost of $1 million per person.

The report said that North's notes of that meeting read: "fundamental decision: do we pay ransom?" The report said North "answered his own question with his actions: he became the operational leader of the project."

The DEA agents then paid $50,000 to their source, with the money coming from the CIA. When an additional $200,000 was requested by the source, the CIA demanded proof the people they were dealing with really controlled Buckley.

When the "proof" arrived, CIA experts determined it was "unacceptable" and Deputy Director Clair E. George termed the plan a "scam, a fake."

At about the same time, according to the report, North turned to Perot for $100,000 in an attempt to free Peter Kilburn, a librarian at the American University in Beirut who was kidnaped in 1984. "North turned to Perot to provide $100,000 in cash and eventually $1 million to obtain Kilburn's release," the report said.

The $100,000 went to an intermediary, but nothing more happened. In April 1986, Kilburn was killed by his captors after the U.S. bombing raid on Libya.

North, however, continued to pursue this type of approach to try to free Buckley. He got Perot to provide another $200,000 in cash, which was turned over to the DEA informer in June 1985. In return, North was told that the hostages could be "freed in exchange for arms," according to the report.

In May 1986, at a time North was arranging for a trip to Tehran with McFarlane that was to free all the U.S. hostages, the DEA agents developed another source who wanted cash for his assistance in freeing the hostages.

This time, North used funds from the Iran arms sales profits. Albert Hakim, who controlled the funds, provided $30,000 to a DEA agent, most of which was to go to the new informer. Perot agreed to provide $1 million to rescue each hostage and, in June 1986, his agent flew to Cyprus with $2 million to await release of the Americans. The plan collapsed, the report said, when "the DEA agents refused to pay over the money until the hostages were freed."

Perot, according to the report, complained about losing money on the operation. A letter from Reagan was addressed to Perot thanking the Texan "for your discreet assistance in this regard." Perot said yesterday in a telephone interview that he never received the letter from the president. According to Perot, North told him the letter was on North's desk when he was fired from the NSC staff last November.

Meese, during his committee testimony, denied knowing anything of Perot's involvement.

The report said Meese's logs showed contacts with Perot in 1985 and a telephone call to him on Nov. 26, 1986, the day after North was fired.

Yesterday, Perot took issue with the suggestion he had contact with Meese about the DEA ransom operation. Perot said he "never had any conversation with the attorney general about the hostages." Perot said that the Nov. 26 call concerned prisoner of war and missing in action matters.

"I had no idea that the attorney general had approved" the hostage ransom operation, Perot said. "I assumed that North had approval all the way up the line."

The report also referred to a Dec. 3, 1986, notation by Meese aide John Richardson, which it said "reflects an instruction by the attorney general to call Perot to check on whether he would respond that the attorney general knew of or authorized the payments."

Perot said he never received a call from Richardson. A Meese spokesman said yesterday the Richardson notation was one made to check into a news story about Perot and not to call him.

In the additional views of the four chairmen, they said a complete set of notes of former White House chief of staff Donald T. Regan was not reviewed until September. "They revealed a conversation between Perot and Regan in December 1986 in which they discussed the possible testimony of North and Poindexter."

Yesterday Perot confirmed that he had talked to Regan about the decisions of North and Poindexter to invoke the Fifth Amendment after leaving the National Security Council. "It looked so bizarre to have two military guys take the Fifth," Perot said yesterday. "I said to Don Regan that we have got to get this cleared up for the sake of the country. He agreed."

Perot said he then had a meeting of less than an hour with North and a phone conversation with Poindexter. "I said to both of them, 'If you step forward and tell everything, full disclosure, I'll do what is necessary to take care of you, your families and your counsel fees.' "

Perot said he did not convince them because lawyers recommended they invoke their right not to testify. Staff writer Bob Woodward contributed to this report.