Decision to Oust Regan Reported : President Sees His Effectiveness at Stake, White House Sources Say

President Reagan has reluctantly concluded that he must replace his embattled chief of staff, Donald T. Regan, and has been personally involved in seeking a successor, according to White House sources.

After standing behind Regan for more than three months, despite increasing pressure to oust him, the President finally decided that the only way to remain as an effective leader during the final two years of his presidency is to replace him, the sources said.

Several sources said that among others, the President is considering Charles H. Price, the ambassador to Britain and a longtime friend, as a new chief of staff. They said that Price is scheduled to arrive in Washington Saturday and is expected to discuss the position with the President.

Scheduled Visit

In London, Price confirmed that he is scheduled to arrive in Washington Saturday but said it is for a long-scheduled visit to discuss State Department business. He said he is “happy” in his present post and is not seeking another assignment.

Although Regan has continued to insist that he has no plans to quit, many other White House aides expect his resignation soon, most likely shortly after the presidential commission that has been investigating the National Security Council delivers its report to the White House Thursday on how U.S. arms were sold to Iran and profits diverted to Nicaragua’s rebels.

“The crunch for Regan will come when that report is delivered,” said one senior Reagan aide. “There are two possibilities for Regan. One, he’ll say he’s been cleared so now he feels like he can step aside. Or two, he’ll say he’s stepping aside so he can clear his name.”

The commission, chaired by former Sen. John G. Tower (R-Tex.), was appointed by the President to analyze his White House decision-making apparatus.

Its report, according to commission sources, will not only criticize Regan for his role in the Iran- contra scandal but imply that he failed in his duty to protect the President as Reagan sought to deal with a controversy that has evolved into the gravest crisis of his presidency.

‘Unseemly’ Process

“The whole process over at the White House in all of this has been unseemly,” said a senior government official familiar with the commission’s investigation. “Don Regan has spent a lot of time protecting Don Regan and not much time time trying to protect the President.”

First Lady Nancy Reagan and the President’s daughter Maureen, who co-chairs the Republican National Committee, have also exerted increasing pressure on Reagan to dismiss his chief of staff, sources said.

Nancy Reagan, according to a former Reagan aide who remains in close contact with her, is fuming because Regan twice hung up the phone in the midst of heated conversations with her.

“That’s the kiss of death for Don Regan,” said the former aide. “You don’t do that to Nancy Reagan and get away with it.”

Publicly at least, the President has said repeatedly that he has no intention of firing Regan.

But last week when reporters, during one of their rare recent opportunities to question the President, asked about Regan’s future, Reagan said: “I have always said that when the people that I’ve asked to come into government feel they have to return to private life, that’s their business and I will never try to talk them out of it.”

Some of the President’s longtime advisers who have urged him to dismiss Regan interpreted that as the first signal he intends to force the chief of staff’s resignation.

At the White House, meanwhile, senior aides say the mood is grim. Although Regan once joked about reports that he was being pressed to resign, aides say he now never mentions the subject and avoids talking about the Iran-contra affair, even though it dominates White House corridor talk.

Last week Regan, apparently chafing over reports of contradictions in some of his testimony before the Tower Commission and Senate Intelligence Committee, opened a senior staff meeting by declaring: “OK, this is a test. For the next 60 seconds, write down everything you did on Aug. 5, 1985, and then swear to it.”

Aides say that senior staff meetings have been unusually tense recently and that Regan has cut them off after only about 20 minutes. He frequently refuses to raise sensitive matters for fear of a leak to the press, one aide said, and instead arranges to discuss them with a single subordinate at another time.

Said to Be Interested

In the search for a successor to Regan, a senior White House aide and a former aide to Nancy Reagan both said that Price is being seriously considered and has expressed an interest in the job.

Price, 54, a former Kansas City banker and wealthy candy manufacturer, served 2 1/2 years as ambassador to Belgium before going to London in late 1983. He and his wife are close friends of the Reagans and annually spend New Year’s Eve with them and other Reagan friends at the Rancho Mirage, Calif., residence of Walter H. Annenberg, a former ambassador to Britain.

Former Sen. Paul Laxalt (R-Nev.), a Reagan confidant who now practices law in Washington, also reportedly is being considered as chief of staff and has said he would take the post if requested to do so by the President. Other potential candidates include former Transportation Secretary Drew Lewis, Energy Secretary John S. Herrington and Treasury Secretary James A. Baker III.

Baker and Regan swapped jobs two years ago after Baker served as White House chief of staff and Regan as Treasury secretary during Reagan’s first term. Baker reportedly prefers to remain as Treasury secretary and would accept the chief of staff post only reluctantly if urged to do so by the President.

Staff writer George Skelton contributed to this story.