The president of Tulane University announced yesterday he will recommend that the school drop basketball and said he has accepted the resignation of Coach Ned Fowler and two assistants in view of revelations that they had made cash payments to players in violation of NCAA rules.

President Eamon Kelly's press conference in New Orleans was held while the Orleans Parish grand jury was considering charges against eight persons, including three Tulane players and three other students, in an alleged point-shaving scheme involving the basketball team. Later in the day, the grand jury returned indictments against all eight, including NBA prospect John Williams, on sports bribery charges.

Kelly said he would strongly suggest to the school's board of administrators that the program be canceled in light of the allegations and Tulane's own investigation, which revealed the player payments, evidently unrelated to the gambling case.

Kelly would not disclose the amount of the alleged improper payments, nor the recipients, but said the university had determined they did occur.

Kelly accepted the resignation of Fowler and assistants Mike Richardson and Max Pfeifer yesterday morning, shortly before the three were to testify before the grand jury in the gambling case.

A source close to the district attorney's investigation said Williams made a statement on the evening of his arrest in which he claimed to have received a $10,000 payment to attend Tulane. He also claimed to have received regular payments once he was enrolled. The source said he considered Williams' claim of a $10,000 payment unlikely.

Kelly and Orleans Parish District Attorney Harry Connick are conducting the investigation into possible point shaving by Green Wave players. The indictments indicate involvement of a 66-65 loss to Virginia Tech Feb. 16 in addition to two previously specified games against Southern Mississippi (won by Tulane, 64-63) and Memphis State (lost by Tulane, 60-49). Connick and Kelly said the player payments had nothing to do with the gambling angle. Fowler and his staff, who have not been implicated, received immunity before testifying.

The grand jury alleges that five Tulane players received at least $36,500 for manipulating the point spread in the three games. Two of the players were granted immunity from prosecution for their testimony.

The indictment charges that the five players received $7,000 for shaving points in the Feb. 2 game against Southern Mississippi and $29,500 for point shaving in a 60-49 loss to Memphis State on Feb. 20. No particulars were immediately on the Virginia Tech game.

The Tulane board of administrators is scheduled to meet April 18, and Kelly expected no opposition to his recommendation that the basketball program be eliminated.

"The only way I know to demonstrate unambiguously this academic community's intolerance of the violations and the actions we have uncovered is to discontinue the program in which they originated," Kelly said at the press conference.

"I cannot see any circumstances in the foreseeable future that would warrant bringing back basketball," he told The Washington Post afterward.

Just last week, in the wake of the point-shaving arrests, Kelly had announced the school would institute a counseling and education program for all athletes to make sure they are aware of the pitfalls of big-time college athletics. He also said that regular drug testing would be instituted.

Kelly said yesterday that the abolition of basketball was painful but necessary for Tulane to maintain its reputation as a respected academic institution. He confirmed that other Tulane athletic programs would not be affected.

"Between the allegations that have been made and the fact that our own investigation demonstrated serious NCAA violations, I thought this was necessary," Kelly said.

"It's a very difficult step for me personally and a very difficult time for the university," he said. "But it's important to reaffirm that the university's primary mission is academics, where teaching, study and research are the main concerns. I also want to send a message out that these activities are unacceptable at Tulane, and see that what has happened doesn't have any impact on our other athletic programs."

The three players indicted in the state's gambling case are 6-foot-11 center Williams and guards Bobby Thompson and David Dominique. Williams and Dominique were charged with sports bribery, Thompson with two counts of conspiracy in sports bribery. Sports bribery carries a maximum penalty of five years in prison and a $10,000 fine. Conspiracy is 2 1/2 years and $5,000. Two other players, Clyde Eads and Jon Johnson, received immunity from the district attorney for their testimony last week before the grand jury.

Thompson, who has not been granted immunity, has told prosecutors that he helped recruit four players to participate in point shaving in a game against Metro Conference opponent Memphis State. Point shaving involves either winning by a lower margin or losing by a greater margin than the established betting line.

Also indicted are three students suspected of setting up the scheme. Gary Kranz of New Rochelle, N.Y., is charged with two counts of sports bribery, two counts of conspiracy to commit sports bribery, and one count of distribution of cocaine; he could get 332 1/2 years. Mark Olensky of Fair Lawn, N.J., is charged with two counts of sports bribery, two counts of conspiracy and one count of conspiracy to distribute cocaine. David Rothenberg of Wilton, Conn., is charged with one count of conspiracy to commit sports bribery.

The two nonstudents indicted are convicted gambler Roland Ruiz and Craig Bourgeois, 23, both on five counts of sports bribery and one of conspiracy. Both are charged only in connection with the Memphis State game.

Against Southern Mississippi, Tulane was a 10 1/2-point favorite and won, 64-63. Tulane was a four-point underdog to Memphis State and lost, 60-49.

Dropping the program would have no effect on other Tulane sports, including women's basketball or football, Kelly said.

However, Tulane must replace it with another Division I sport by next fall if all of its athletic program is to continue at the Division I level, Athletic Director Hindman Wall said.

The last Division I school to drop men's basketball was the University of San Francisco in July 1982. USF ordered the team disbanded after three violations of NCAA rules in five years, including a charge that athletes were being paid by alumni for jobs they didn't perform. USF announced last year it was resuming its basketball program in 1985-86.

Reaction to Kelly's decision was mixed. Ben Weiner, a heavy contributor and fund raiser for the athletic program, said it was unfortunate but understandable.

"I'm hoping he'll reconsider and change his mind," Weiner said. "But I can't say I blame him."