A controversial memorandum to Attorney General Edwin Meese III from his close friend E. Bob Wallach was ordered classified by independent counsel James C. McKay after a top aide to Meese suggested the document might involve national security, Meese's lawyer said yesterday.

Nathan Lewin, Meese's attorney, said, however, that when he first read the 1985 memorandum discussing a proposed Iraqi pipeline project, "I don't think I thought about it as having anything that was national security stuff. Neither did I think there was anything in there that was criminal."

Lewin said he had no objection to having the memorandum made public and that Meese had nothing to do with the classification.

McKay had no immediate comment yesterday. But sources familiar with the inquiry said McKay's office made the classification reluctantly on the recommendation of outside experts.

In the memorandum, Wallach allegedly described a plan to make payments to the Israeli Labor Party in order to secure guarantees that Israel would not attack a proposed Iraqi pipeline that was to run close to its territory.

Meese said Monday that he could not describe the memorandum in detail because it is classified, but that the 10 words that have "given rise to this speculation" do not "fairly impl{y} that a violation of law was committed or contemplated in connection with the pipeline."

Wallach, Meese's former lawyer, at the time represented a Swiss businessman promoting the pipeline. McKay is investigating Meese's involvement with Wallach, who has been indicted in New York on charges that he extorted payments from the Wedtech Corp. to influence Meese and other administration officials.

Lewin said the 1985 memorandum was ordered classified after it was discovered in a search of the attorney general's files in response to a request by McKay for all documents relating to Wallach. "The staff people found it among other documents . . . . When they saw that particular memorandum which had not been classified it was believed that maybe because of some of the things that were in it, it was classifiable," Lewin said.

He said he believed the aide was John N. Richardson Jr., the attorney general's chief of staff.

Lewin said the Meese aides asked Jerry Rubino, the department's security officer, what should be done and Rubino put an interim "top secret" classification on the memo, meaning that its release could cause "exceptionally grave harm to the national security." After consultation with the State Department, Lewin said, the classification was reduced to "secret," meaning that release could cause "serious damage."

However, because the document involved the head of the Justice Department, Lewin said, it was decided that McKay, and not a department official, should make the final decision about whether it should be classified. He said McKay then asked Assistant Attorney General Harry H. Flickinger in a Jan. 7 letter for formal authority to classify documents.

Lewin said he was "surprised . . . that a memorandum from a private party to someone in the government can end up being classified. All my instincts were if a private party originates it, how can it end up being classified?"

Regulations governing disclosure of classified material require that persons undergo background checks and receive security clearances before being given access to classified documents. Meese's lawyers have obtained security clearances.

In a brief exchange with reporters at the Justice Department yesterday, Meese said "I have no objection" to release of the memorandum "nor do I have any lack of objection" because the matter is out of his hands.

Staff writer George Lardner Jr. contributed to this report.