Congress is on the verge of rewriting the rules of covert operations in the wake of the Iran-contra scandal.

The new rules are contained in a Senate Select Committee on Intelligence bill that would consolidate all congressional oversight provisions and practices in a single statute.

It would require written presidential approval of covert actions undertaken by any component of the U.S. government and make it the president's duty to keep Congress informed of his decisions.

Current law, which would be repealed, applies only to covert operations of the Central Intelligence Agency and is ambiguous about whether the president must approve them in writing. The existing rules also make it the CIA director's responsibility to keep Congress informed about these and other U.S. intelligence activities.

The Senate enacted the measure just before the August recess as part of the 1991 intelligence authorization act. The House Permanent Select Committee on Intelligence did not incorporate any of the new rules in the authorization bill it approved earlier this month, but it is expected to agree to many of them later this year in conference with the Senate.

However, at a news conference yesterday, some critics objected that the proposal authorizes too much while regulating too little.

Among the protesting groups, the American Civil Liberties Union said it would change its opposition to strong support if some key provisions are amended. But the Christic Institute and several allies maintained that the proposed law is unconstitutional and would even legalize some of the worst features of the Iran-contra scandal.

Rep. Matthew F. McHugh (D-N.Y.), chairman of the House intelligence subcommittee on legislation, in an interview this week said there is a good chance that House conferees will accept "a significant amount" of the Senate's covert action language.

McHugh said he prefers a separate vote on the new rules when the conference report goes to the House floor. Usually conference reports are subject only to an up-or-down vote on the entire measure, but Morton Halperin, Washington director of the ACLU, said a separate vote on any covert action section could be arranged if House conferees take it to the floor saying they are in "technical disagreement" with it.

Halperin said the ACLU is opposed to covert operations, but "as long as they go forward, we believe that improved oversight is needed." He said the Senate proposal is unacceptable to the ACLU primarily because it would for the first time explicitly "authorize the conduct of covert actions."

Existing law, enacted in 1974 and known as the Hughes-Ryan amendment, is couched as a prohibition, saying that no funds can be spent on CIA covert operations "unless and until the president finds that each such operation is important to the national security."

Calling the negative formulation "essential," Halperin said he is confident that House Intelligence Committee members would insist on it as they did in 1988 when the issue first came up.

The Hughes-Ryan rule defines covert action as any CIA activity abroad "other than activities intended solely for obtaining necesssary intelligence." But according to the Senate Intelligence Committee, Congress has been more permissive in practice and exempted other operations so long as their "primary purpose" was to collect intelligence.

The new bill would repeal Hughes-Ryan and define covert action as activity "conducted by an element of the United States government to influence political, economic or military conditions abroad so that the role of the United States government is not intended to be apparent or acknowledged publicly."

Lanny Sinkin, an attorney for the Christic Institute, assailed the bill as an unconstitutional expansion of presidential power, permitting the president to use any federal agency for covert operations, and allowing him to use any third country or private contractor as was done in the Iran-contra scandal.

The bill would require the president to notify Congress of his covert action determinations, at least "in a timely fashion," and to specify whether any third party "will be used to fund or otherwise participate in any significant way."

David McMichael, Washington director of the Association of National Security Alumni, called the measure "insidious" and said congressional oversight of covert actions was difficult enough when only the CIA was into it.