Most high-level White House aides believed that President Reagan was so depressed, inept and inattentive early last year in the wake of disclosures in November 1986 about the Iran-contra scandal that the possibility of invoking the 25th Amendment to remove him from office was raised in a memo to Howard H. Baker Jr., who was just taking office as Reagan's chief of staff.

Former Baker aide James Cannon, confirming facts reported in a newly published book, said in an interview yesterday that he wrote a March 1, 1987, memorandum based on the aides' concern and raising the possibility of applying the amendment.

Baker took the recommendation seriously and, with Cannon and two of his own aides, spent part of a day observing Reagan's behavior before concluding that the president was sufficiently competent to perform his duties, according to the book.

However, Baker later said that even though he accepted Cannon's concerns as legitimate, he never seriously considered invoking the 25th Amendment.

"I didn't take Cannon's memo lightly," Baker said in an interview yesterday, "but from the first time I saw him {Reagan}, he was fully in control and I never had any question about his mental competence."

The White House declined direct comment.

The existence of Cannon's memo and facts leading up to it are reported in "Landslide: The Unmaking of the President, 1984-88," by Jane Mayer, a Wall Street Journal reporter who covered the Reagan White House, and Doyle McManus, a Los Angeles Times reporter who has covered the Iran-contra scandal.

The book gives a detailed behind-the-scenes look at the presidency during Reagan's gravest political crisis.

"Landslide" reports that Baker, on the weekend before becoming chief of staff on Feb. 27, 1987, sent longtime aides Cannon and Thomas Griscom into the White House to look into reports of internal disorder in the wake of the Iran-contra scandal. Cannon assisted Baker in the first weeks after Baker became chief of staff but for health reasons declined a permanent White House post.

Cannon and Griscom were shocked by what they found. "Chaos," Cannon reported in his memo to Baker. "There was no order in the place. The staff system had just broken down. It had just evaporated."

Even more chilling, Cannon told Mayer and McManus, was the portrait that White House aides drew of Reagan: "They told stories about how inattentive and inept the president was. He was lazy; he wasn't interested in the job. They said he wouldn't read the papers they gave him -- even short position papers and documents. They said he wouldn't come over to work -- all he wanted to do was to watch movies and television at the residence."

Cannon told the Los Angeles Times that he interviewed 15 to 20 White House officials, including senior aides, and "the overwhelming majority" painted that portrait of Reagan.

The portrait was so deeply disturbing to Cannon, who had served as an aide to Vice President Nelson A. Rockefeller and as domestic policy adviser to President Gerald R. Ford, that he began his memo to the incoming chief of staff with this startling recommendation:

"1. Consider the possibility that section four of the 25th Amendment might be applied." The amendment, added to the Constitution in 1967, provides that the president may be removed if the vice president and a majority of the Cabinet declare him "unable to discharge the powers and duties of his office."

According to "Landslide," Baker was skeptical but did not dismiss the idea. "It doesn't sound like the Ronald Reagan I just saw, but we'll see tomorrow," he told his aides.

They decided to observe Reagan first-hand before making any decision. At a meeting in the White House on March 2, 1987, Baker, Cannon, Griscom and Baker aide A.B. Culvahouse bracketed Reagan at the Cabinet table so that they could watch his every move. To Cannon's surprise, Reagan seemed attentive and alert, charming and glib -- the same Reagan he had known for years.

Nevertheless, Mayer and McManus argue that the situtation did involve a brush with a constitutional crisis. They quote several Reagan aides who described the president as inattentive and indecisive and report that both Secretary of State George P. Shultz and then-national security adviser Robert C. McFarlane repeatedly offered to resign to break the White House's internal paralysis on foreign policy issues.