The federal government is in the final stages of determining what classified information could be presented in court against Wen Ho Lee, clearing the way for a possible indictment of the former nuclear weapons scientist as early as next week, according to senior administration officials.

Justice Department prosecutors have been wrestling for months over whether to seek an indictment against Lee, a U.S. citizen from Taiwan who was fired in March for alleged security violations at Los Alamos National Laboratory in New Mexico, where he had worked for almost 20 years.

Officials indicated the government has decided not to prosecute Lee for espionage, since there is no evidence that he deliberately turned over nuclear secrets to China. However, the U.S. attorney in Albuquerque, John J. Kelly, may seek an indictment for gross negligence in handling classified information.

Energy Secretary Bill Richardson was briefed last week on the types of classified information that might have to be made public as evidence in a trial.

"Energy's security office has been working with other federal officials to make sure that if we do declassify information, that there is no harm to national security," a spokeswoman, Brook Anderson, said yesterday. "The actual declassification decision has not yet been made."

The FBI focused on Lee three years ago as the main suspect in China's alleged theft of secrets about the W-88, the most advanced warhead in the U.S. nuclear arsenal. He was fired from Los Alamos after he admitted failing to report some contacts with foreigners and after a polygraph test indicated he gave deceptive answers to questions about espionage.

A subsequent search showed he had downloaded top secret "legacy codes"--essentially, mathematical models of nuclear explosions--from the classified computer system at Los Alamos to his unclassified office computer.

Lee has denied giving classified information to China and has maintained that the legacy codes on his office computer were protected by at least three passwords, making unauthorized access all but impossible.

Together with a dire report by a congressional committee headed by Rep. Christopher Cox (R-Calif.), Lee's case created a furor over Chinese espionage early this year. Yet scientists, federal investigators and members of Congress still debate whether China stole important secrets and, if so, who is to blame.

Several officials involved in the probe have claimed that investigators focused on Lee because of his ethnicity. Bowing to widespread criticism, the FBI announced this fall that it would widen the probe to consider other suspects and, indeed, whether espionage occurred at all.

The Justice Department, meanwhile, has been considering whether to indict Lee under various statutes.

One section of the federal law on espionage makes it a crime for any person who is entrusted with classified defense information to allow it "to be removed from its proper place of custody" through "gross negligence." Another section requires anyone who knows that such information has been illegally removed to report the loss promptly.

Violations of either of these provisions are felonies that carry a maximum sentence of 10 years in prison. Prosecutions for such cases are rare but not unknown.

In 1994, for example, Marine Sgt. Rickie L. Roller was convicted for transferring classified materials from his desk to his garage while preparing to move to a new assignment. Roller argued that the documents had not been turned over to a third party and thus were not compromised. But the court ruled that the law prohibits removing classified information from its proper place and "does not necessarily imply the involvement of a third party."

"It is clear that Congress intended to create a hierarchy of offenses against national security, ranging from 'classic spying' to merely losing classified materials through gross negligence," a court said in another case.

In the Los Alamos case, the Justice Department also could bring a lesser charge against Lee: removing classified information "without authority and with the intent to retain such documents or materials at an unauthorized location." This is a misdemeanor that can be punished by a $1,000 fine and up to a year in prison.