In the mid-1970s, the U.S. Bureau of Prisons instituted what its former director describes as a humanitarian gesture, installing telephones in the nation's 66 federal prisons so prisoners could "maintain a semblance of family ties" by calling home.

But soon after the practice began, Norman A. Carlson, who then headed the bureau, said officials discovered a few inmates were plying their old tricks, running "highly sophisticated criminal enterprises" by telephone.

Embarrassed, the bureau decided to keep the telephones, but monitor all the conversations, a policy that seems now certain to be tested in the highly publicized prosecution of deposed Panamian leader Manuel Antonio Noriega.

By apparently taping a telephone conversation he had from the Miami jail with the law firm that represents him in his drug case, Noriega's lawyers claim, the government may have placed its case at risk. Eavesdropping on supposedly privileged conversations could automatically jeopardize Noriega's constitutional right to a fair trial, they said.

In recent years, however, federal courts have narrowed the rights of prison and jail inmates so that accidental -- or even deliberate -- eavesdropping on supposedly privileged conversations between a lawyer and his client has not been enough to prevent a trial.

Judges may have chastised federal and local law enforcement agents for making such recordings, but they rarely have allowed such conduct to free a defendant. In a 1977 decision, the Supreme Court held that even the presence of a government informant at a meeting between a lawyer and his client did not violate the defendant's Sixth Amendment right to a lawyer.

Subsequent rulings indicate that defense lawyers must prove that the eavesdropping, or accidental review of the lawyers' mail, damaged their clients' rights. Without such a showing, the courts have turned away from previous holding that a defendant's right to consult with his lawyer was inviolate and could not be impinged on in any manner.

Perhaps reflecting the large number of conservatives named to the federal bench in the past decade, the courts have increasingly sided with prison officials over steps, such as telephone monitoring, that authorities say are needed for institutional security.

At the same time, said Ira Robbins, an American University law professor, "the Supreme Court has been shaving away at that wall" that used to set separate standards for the rights of inmates awaiting trial and those convicted of crimes.

Justice Department officials decline to discuss what may have happened in the Noriega case, citing an ongoing FBI investigation and the possibility that the taping issue may raised in the courts.

There is no dispute over what was supposed to happen. The Bureau of Prisons' telephone regulations, revised in 1983, specifically state that the staff "may not monitor an inmate's properly placed call to an attorney." Nor is there any doubt the agency does monitor telephones at all its institutions, many with machines that can tape up to 20 calls simultaneously.

The bureau's general taping policy was upheld by the 2nd U.S. Circuit Court of Appeals in a 1988 ruling. It noted then that signs in the prison warned inmates of the practice and all had signed statements acknowledging the policy.

When they arrive at a prison, inmates are asked to sign waivers acknowledging that they have been warned about the monitoring and advising them they can make an unmonitored telephone call to a lawyer, if they request it.

The 11th U.S. Circuit Court of Appeals panel, which rejected an appeal by the Cable News Network of an order barring broadcast of the Noriega tapes, also raised the possibility that Noriega himself may have waived his rights by signing the bureau's telephone consent order.

"It is a bedrock principle that the attorney-client privilege is the client's and his alone. If the client wishes to waive it, the attorney may not assert it, either for the client's or his own benefit," the panel said, citing another ruling by the 5th Circuit.

If Noriega failed to make such a request, there is a possibility that his conversation may have wound up with hundreds of others on what Scott Burton, a bureau spokesman, described as the "gigantic tape reel" at the Miami Metropolitan Correctional Center where Noriega is awaiting trial.

Prison officials won't describe how the tapes are reviewed. Carlson, the former prisons director, would only say that the work is assisted by computers and that "a lot of technology is involved." It "is not a perfect system," he said, adding hat a key object of the repeated warnings and signs posted near prison telephones is to make inmates aware that any call is likely to be monitored.

One of the lawyers representing Noriega has said that, since the general was being held in isolation, a guard had to physically dial all telephone numbers for him. Once the number answered, the guard would pass the receiver to Noriega. This should suggest that the guard knew Noriega was talking to his lawyers, the attorney said.

Alvin Bronstein, director of the National Prison Project and a leading authority on prisoner rights, said he doubts whether the government deliberately taped Noriega. "There may have been a communication breakdown," he said.