Independent counsel James C. McKay met at the White House with senior aides to President Reagan yesterday and told them that his investigation of Attorney General Edwin Meese III has become very serious, according to informed sources.

McKay reportedly said that his inquiry into Meese's involvement in 1985 in discussions about a $1 billion Iraqi pipeline project will take a few more weeks. Other sources said it is "in the homestretch" but declined to predict its outcome.

The pipeline investigation, which began about three months ago, now focuses on a controversial memo that was written to Meese in 1985 by his longtime friend and unofficial adviser, E. Bob Wallach. It allegedly referred to a plan to bribe a senior Israeli official to help prevent Israeli attacks on the proposed pipeline.

The memo, according to U.S. government officials, came out of Meese's files and was provided to prosecutors in McKay's office in response to their request for pertinent documents.

Sources have told the Los Angeles Times, which revealed the memo's existence yesterday, that Shimon Peres, who in 1985 was Israel's prime minister and is now foreign minister, was the official proposed for the payoff.

Meese yesterday avoided reporters at the Justice Department seeking to question him about the alleged bribery memo. His lawyers, however, deplored news accounts and said "no actual or potential violation of law was brought to Mr. Meese's attention during his limited participation in discussions regarding the project."

"Information that is false in certain respects has apparently been leaked from 'government sources' to the press," Meese's chief attorney, Nathan Lewin, added in a in prepared statement.

Lewin said no detailed reponse was possible "because an investigation is under way and because relevant information is classified. And it is irresponsible to publish those erroneous allegations when they involve the delicate subject of foreign relations and impugn the integrity of respected foreign leaders."

White House spokesman Marlin Fitzwater said yesterday that the president still has full confidence in Meese.

Informed sources said yesterday that Wallach has told U.S. officials that he met twice with Peres in 1985 to discuss the Iraqi pipeline, which Wallach was promoting as the representative of Bruce Rappaport, a wealthy Swiss businessman involved in the venture. Rappaport, who reportedly is close to leading Israeli political figures, was also said to have met with Peres about the project.

McKay is investigating Wallach's activities in connection with the pipeline and Meese's reported failure to do anything about what may have been an imminent violation of the Foreign Corrupt Practices Act, which prohibits U.S. citizens from bribing foreign officials.

Yossi Gal, a spokesman for the Israeli Embassy here, said, "I don't know what this memo was or who Mr. Wallach is. The only thing I can say with authority is that no money or anything of value has been offered or given to Mr. Peres or to anybody else by anybody involved in this project."

Gal said he could not immediately respond to Wallach's reported claims of having talked with Peres about the pipeline project, once on a Wallach trip to Israel in 1985 and later, in October 1985 when Peres visited Washington.

Former government officials said Wallach described Peres as favorably disposed to the project that one source said Wallach touted as being vital to Israel's future. Wallach reportedly argued that Iraq, a potential threat to Israel, would be disinclined to go to war after pouring $1 billion into a pipeline the Israelis could easily blow up.

The proposed 540-mile pipeline, which was never built, would have run close to Israeli territory on its way from Iraq's Kirkuk oil fields to the Jordanian port of Aqaba, off the Red Sea.

The pipeline was to have been designed and built under the supervision of the Bechtel Group, a worldwide engineering company with headquarters in San Francisco. Work was expected to start in the fall of 1984, but President Saddam Hussein of Iraq indicated earlier that year that his country was not satisfied with the oral assurances it had received from the United States that Israel would not attack the pipeline as it had attacked Iraq's nuclear reactor near Baghdad in 1981.

In mid-July of 1985, Bechtel signed a one-year agreement that Wallach negotiated as Rappaport's new lawyer.

Bechtel spokesman Al Donner said yesterday that "we were generally aware of a couple of meetings Rappaport had with Peres" in 1985 before Peres came to Washington. Donner said "our people must have had a sense that they {the Israelis} were favorably disposed, at least in the early stages."

Wallach, meanwhile, began lobbying for the project in Washington, invoking national security interests and seeking U.S. government guarantees through the Overseas Private Investment Corp. (OPIC), a government agency that insures foreign investments by U.S. firms.

In the summer of 1985, sources said, Wallach used his ties with Meese to obtain a meeting with then-White House national security adviser Robert C. McFarlane, whom he interested in the project.

OPIC officials said yesterday that the original plan for its support revolved around a $100 million cash fund that was to have been raised by private parties with interests in the pipeline and used as a "salvage fund" by OPIC in case of damages. But that plan fell through. And in October 1985, OPIC officials said, Wallach came in with a complicated proposal that would have relied on U.S. foreign aid funds for Israel to be transferred to Iraq in case of damages.

In a memo on Oct 17, 1985, OPIC asked Meese for the Justice Department's opinion. Israeli Prime Minister Peres was in Washington that day, meeting with Reagan and attending a reception at the State Department. Wallach claimed to have met with Peres on this visit to the United States, which lasted from Oct. 16 to Oct. 24.

OPIC general counsel Eric Garfinkel said yesterday that the Peres visit had nothing to do with the timing of OPIC's request to Justice. "We sent it to Justice within a day or so of receiving the proposal from Wallach," he said.

{Peres secretly agreed the next month to guarantee that Israel would not attack the pipeline and pledged that Israel would use future U.S. aid payments to repair the pipeline should it be attacked, the Los Angeles Times reported last night.}

Wallach lobbied a deputy assistant attorney general, Allan Gerson, who did special assignments for Meese on national security issues, for a favorable ruling, according to sources, but he and other lawyers in the Office of Legal Counsel at Justice frowned on the scheme. A formal ruling was never issued to OPIC because the project foundered of its own weight.

Sources familiar with the McKay investigation say his office regards the pipeline memo as the most serious issue involving Meese since it began investigating his conduct last May as an outgrowth of the Wedtech scandal. Meese's involvement in discussions involving telephone industry regulation while he and his wife, Ursula, held legal title to stock in the seven regional "Baby Bell" companies has also come under scrutiny by McKay's office.

Staff writer Don Oberdorfer and researcher Michelle Hall contributed to this article.