Attorney General Janet Reno has approved a plan to create a separate FBI division for counterintelligence in response to allegations that Chinese spies stole nuclear secrets from U.S. national laboratories, a senior Justice Department official said yesterday.

Officials at the FBI, CIA and Department of Defense have been discussing a possible reorganization of counterintelligence operations for months. But in the wake of a scathing congressional report on Chinese espionage, Reno "has signed off" on the proposal and forwarded it to the White House, the senior official said.

Primary responsibility for counterespionage operations belongs to the National Security Division of the FBI. But that division also has other duties, including combating international terrorism.

The proposed restructuring, first reported in today's edition of the New York Times, would create a separate division whose sole purpose would be to root out spies and protect America's vital secrets.

Amid mounting allegations of Chinese espionage this year, Reno's Justice Department has come under criticism for refusing to approve FBI requests in 1997 to install wiretaps on Wen Ho Lee, a nuclear scientist at Los Alamos National Laboratory. Lee was fired in March for alleged security violations, though he has not been charged with any crime.

Justice Department officials who reviewed the wiretapping requests concluded that the FBI did not have enough evidence to support them.

The restructuring of America's counterintelligence efforts is just part of the burgeoning response to the release last month of a report on Chinese espionage by a bipartisan congressional committee headed by Rep. Christopher Cox (R-Calif.).

A possible reorganization of the Department of Energy, which controls the national laboratories, is also under discussion. And Energy Secretary Bill Richardson has ordered the polygraphing of an estimated 5,000 employees in the nuclear weapons complex, the federal government's first widespread use of "lie detector" tests outside of the CIA and National Security Agency.