Last week's indictment of former defense secretary Caspar W. Weinberger comes at a troubled juncture for the independent counsel statute under which prosecutors are investigating the Iran-contra affair.

A consensus is growing among key House Democrats to let the much-debated 1978 statute lapse at the end of the year, then try to enact it again next year after political tensions subside and a new Congress takes office.

"Things have gotten so political and so angry this year, maybe it's best to let it lapse a few months," said Rep. Barney Frank (D-Mass.), who helped shepherd the statute through two previous renewals. He said independent counsels who were already conducting investigations could continue their work but that no new ones could be appointed in the interim.

"There's been sort of a recognition that it is something that will probably have to be handled by the next Congress," said a key House leadership aide. "If that makes it more difficult {to renew}, it makes it more difficult. At least it will be judged on the merits."

The statute is an outgrowth of the Watergate period when President Richard M. Nixon caused a sensation by firing special prosecutor Archibald Cox after Cox subpoenaed White House tape recordings. Congress subsequently enacted a complicated, step-by-step procedure that allows a special court to appoint an independent counsel to investigate and prosecute wrongdoing by high-ranking administration officials.

Since adoption of the law, 11 independent counsels have been appointed; seven concluded they had insufficient evidence to seek indictments. The Justice Department wrapped up another 21 preliminary inquiries without seeking an independent counsel, according to a Senate Governmental Affairs subcommittee.

Former Reagan administration aide Michael K. Deaver pleaded guilty to perjury after one inquiry; after another, former Reagan adviser Lyn Nofziger was found guilty of illegal lobbying, but an appeals court overturned his conviction. An inquiry into a contract scandal at the Department of Housing and Urban Development has produced several indictments.

But no investigation has galvanized critics like that of Lawrence E. Walsh, who was appointed 5 1/2 years ago to investigate Reagan administration efforts to sell arms to Iran for release of hostages in Lebanon and divert profits from those sales to aid contra rebels in Nicaragua.

Although Walsh's $30 million inquiry has resulted in 10 successful prosecutions, appeals courts have overturned his biggest convictions -- against former White House national security adviser John M. Poindexter and former National Security Council aide Lt. Col. Oliver L. North. Appellate judges found the cases were tainted by North's and Poindexter's immunized testimony before Congress.

Republicans in the administration and on Capitol Hill now characterize Walsh as the embodiment of everything that is wrong with the statute: no limits on how long an independent counsel can investigate or how much one can spend, no oversight, no assurance the prosecutor meets the Justice Department's threshold for seeking indictments.

They found fresh fodder in last week's charges of perjury and obstruction of justice against Weinberger, one of the few senior Reagan administration officials who opposed the arms sales. "I think the Iran-contra investigation has gotten out of hand," said Rep. Henry J. Hyde (R-Ill.). "I think there should have been a judgment made a long time ago about whether it was worth proceeding with this."

The Wall Street Journal, in a Thursday editorial, said: "We suspect Mr. Walsh has finally gone too far."

One Justice Department official said of the indictment: "This will make people really mad."

While Attorney General William P. Barr has not commented on Walsh's investigation, Barr has stepped up his criticism of the statute on independent counsels in the past several months. At his Senate confirmation hearing last November, Barr said he would support renewing the act if "certain practical concerns" were resolved. In April, Barr said the statute has led to injustices and that he would recommend that President Bush veto extending it unless it is substantially changed.

Barr cited "real problems" with the selection of independent counsels, their accountability and their adherence to Justice Department standards. He also said the act should be broadened to cover members of Congress, an uncomfortable issue for many lawmakers.

As the independent counsel procedure now works, the attorney general first conducts a 15-day inquiry, on his initiative or at the request of the majority of Democrats or Republicans on the House or Senate Judiciary committee. If the inquiry shows the evidence is specific and from a credible source, the attorney general must then conduct a preliminary 90-day investigation.

If further investigation is warranted, the attorney general seeks appointment of an independent counsel by a special division of the D.C. Circuit Court of Appeals.

Fred Wertheimer, president of Common Cause, said he suspects Barr wants to "kill the statute" by making independent counsels subordinate to the attorney general, much like special prosecutors. Special prosecutors are typically appointed by the attorney general to investigate highly sensitive or politically charged allegations, such as misconduct at the House Bank.

Wertheimer said his organization will fight to remind lawmakers why the independent counsel statute was first adopted -- to create "a way of investigating and prosecuting the highest-level executive branch officers by someone who is not under the control of the attorney general."

"The statute is just as important today as it was the day it was enacted," he said. "If it is not reenacted and goes out of existence by the end of this year, it would be a tremendous loss to our country."

Since enactment of the Ethics in Government Act in 1978, 11 independent counsels have been named to investigate government figures.

ARTHUR H. CHRISTY

Appointed: Nov. 29, 1979

Allegations: Cocaine use by President Jimmy Carter's chief of staff, Hamilton Jordan.

Result: Insufficient evidence.

GERALD J. GALLINGHOUSE

Appointed: Sept. 14, 1980

Allegations: Cocaine use by Tim Kraft, Carter's senior White House aide before Kraft became Carter's national campaign manager.

Result: Insufficient evidence.

LEON SILVERMAN

Appointed: Dec. 29, 1981

Allegations: Illegal payoffs to union officials by Raymond J. Donovan, labor secretary during the Reagan administration. Silverman also explored rumors of Donovan links to organized crime. In 1985, an additional charge involving an alleged kickback made in 1976 was investigated.

Result: In both cases, insufficient evidence.

JACOB A. STEIN

Appointed: April 2, 1984

Allegations: Financial and political improprieties by Edwin Meese III, attorney general during the Reagan administration.

Result: Insufficient evidence.

WHITNEY NORTH SEYMOUR JR.

Appointed: May 29, 1986

Allegations: Improper lobbying by former White House aide Michael K. Deaver.

Result: Convicted on three counts of perjury. Deaver's three-year sentence was suspended and he was placed on probation, fined $100,000, ordered to perform 1,500 hours of community service and barred from lobbying the government for three years.

ALEXIA MORRISON

Appointed: May 29, 1986

Allegations: False testi-mony given by former assistant attorney general Theodore B. Olson in regard to Enviromental Protection Agency documents withheld from Congress.

Result: Insufficient evidence.

LAWRENCE E. WALSH

Appointed: Dec. 12, 1986

Allegations: Illegalities involving diversion of profits from arms sales to Iran to aid the Nicaraguan contras.

Result: Ten convictions, two of which were dismissed on appeal. One person was sentenced to prison.

JAMES C. McKAY

Appointed: Feb. 2, 1987

Allegations: Illegal lobbying by Lyn Nofziger, former Reagan political adviser, and questionable business dealings by Meese on behalf of Wedtech Corp., a New York-based defense contractor.

Result: Nofziger was indicted on conflict-of-interest charges and convicted on three counts of illegal lobbying. The verdict was overturned by an appeals court; the Supreme Court refused to rule on the case. McKay found insufficient evidence in the Meese case.

JAMES HARPER

Appointed: Aug. 17, 1987

Allegations: Illegalities involving the finances of former assistant attorney general W. Lawrence Wallace, who failed to file personal income-tax returns for two years.

Result: Insufficient evidence.

ARLIN M. ADAMS

Appointed: March 2, 1990

Allegations: Illegal contributions of federal housing subsidies to political and business associates of Department of Housing and Urban Development (HUD) officials.

Result: Eight have been charged; the investigation is ongoing.

COMPILED BY LUCY SHACKELFORD

SOURCES: Facts on File, Congressional Quarterly, The Wasington Post