MIAMI, MAY 24 -- A deal by the federal government to pay the legal bills of deposed Panamanian leader Manuel Antonio Noriega collapsed today in court when a federal judge advised both sides that the government is limited, by law, to paying a maximum of $75 an hour in attorneys' fees.

Under an arrangement Monday between the U.S. Attorney's office here and Noriega's defense team, the government was to pay for Noriega's multimillion-dollar defense in exchange for an agreement to drop subpoenas designed to force the government to reveal how much it paid Noriega during the years he worked as an intelligence agent.

Noriega has maintained since his arrest in January that he cannot pay legal bills because the United States has seized or frozen all his assets. Noriega's lawyers contended that some of the assets were acquired legitimately and should be freed so he can pay bills.

Under terms of Monday's agreement, the four defense lawyers understood that they could collect between $200 and $300 an hour in legal fees.

Frank Rubino, lead defense lawyer, said the smaller fee was "ludicrous."

"If this court would rule at a rate of $40, $60 or $75 an hour to try this case, I think in all sincerity it would make a mockery of due process," Rubino told the court.

After the hearing, he chastised government lawyers. "All they did was jerk us around for five days," he said. "They made an agreement with us they can't fulfill."

U.S. District Judge William Hoeveler opened today's session by advising the lawyers of his reading of the law regarding government-paid fees for indigent defendants.

"That means, counsel, we are back to square one," he said. "The government is going to have to make some decisions on what they want to produce and not produce."

Acting U.S. Attorney Dexter Lehtinen told the court today that there "is not any agreement or any deal." He said the government agreed to pay Noriega's legal bills because the government provides such payments for indigents.

But Rubino, who said he was taken by surprise at the crumbling of the agreement, was outraged. "There is indigency, and there is forced indigency," he said. "No man after 25 years has acquired nothing in his life. The janitor in my building has acquired something in his humble life. To say that everything Noriega has acquired is related to the charges is ludicrous."

The judge noted that the law could not be overturned even in this highly unusual case against a former head of state.

Noriega, Hoeveler said, was "no different from so many other defendants who appear before this court. Because he's a head of state doesn't mean he's entitled to more than the man arrested off the street."

But the judge added that "the government has taken all of his money, and we have to determine what portion of the money he is entitled to. Frankly, I would rather he pay his bills than the taxpayer."

The defense team contends that Noriega was paid $11 million by the U.S. government and $6 million by other countries for work performed for them.

Lehtinen said Noriega has never submitted a list of assets that he suspects are frozen, and Rubino countered that the government was required by law to notify Noriega of the seized assets, which it has not done.

Lehtinen said that at least $5.5 million seized from Noriega's house during the invasion of Panama last December was turned over to the new Panamanian government. He said Noriega advised Drug Enforcement Administration agents that the money belonged to Panama.