Reagan Vows to Continue Aid to Contras : Says Funds to Flow Until Nicaragua Embraces ‘True Democracy’

President Reagan vowed Friday to keep American aid flowing to the anti-Sandinista rebels fighting in Nicaragua until “true democracy” exists in the war-torn Central American nation.

Three days after President Oscar Arias Sanchez of Costa Rica asked him to give the revived efforts to achieve peace in Central America a chance to succeed, Reagan declared:

“Communist Nicaragua is in fact a Soviet beachhead in the Americas. . . . Aid to the freedom fighters must, and will, continue. The American people want it, justice demands it, and it is the only way to make the Marxist-Leninists in Managua sincerely talk peace.”

‘Raw-Meat Speech’

His address, delivered to cheering members of Concerned Women of America, drew immediate criticism on Capitol Hill. An aide to House Speaker Jim Wright (D-Tex.) called it “a raw-meat speech.”

The aide, who asked not to be identified, said that by insisting on continuing financial support for the rebels, Reagan Administration officials “seem to be doing all they can to take themselves out as significant players in Central America.”

Nicaragua and four of its neighbors--El Salvador, Honduras, Costa Rica and Guatemala--reached agreement Aug. 7 on a peace plan that sets a series of conditions that must be met by Nov. 7.

The conditions include a cut-off of aid from outside nations to the contras and other rebel movements in the Central American nations. In addition, the plan calls for establishment of full freedom of the press, speech and assembly in Nicaragua; steps toward a cease-fire between Nicaragua and the contras, and amnesty for rebels and political prisoners in the five nations.

Stop-Gap Aid Measure

The Administration has maintained that the Nicaraguan government will feel no pressure to abide by the peace plan’s requirements unless the contras are in a position to maintain their military strength. And only U.S. aid, it has said, can guarantee that.

The current $100-million aid program expires Sept. 30 and the Senate on Friday approved an additional $3.5 million in non-lethal aid for the next 40 days. The measure, already approved by the House, now goes to Reagan for his signature.

Secretary of State George P. Shultz told Congress earlier this month that the Administration ultimately will seek $270 million for the contras over the next 18 months. An Administration source, speaking on condition of anonymity, has said that the President would submit the request during the week of Nov. 15, a week after the Nov. 7 deadline for meeting the terms of the peace proposal.

The aid package faces a hostile reception in Congress. “It’s not going to happen,” said Wright’s aide. “We’ll just vote it down.”

Reagan, in his remarks Friday, indicated that the Nicaraguan government faces a heavy burden of proof as it seeks to demonstrate the commitment to democracy that the Aug. 7 peace plan requires.

Warns of ‘False Peace’

“Anything short of true democracy in Nicaragua will at best bring only a false peace to Central America,” he said. “The wound will fester and the infection will break out once again.”

In recent days, the Nicaraguan government has granted the nation’s only opposition newspaper, La Prensa, permission to resume publication for the first time in more than a year. And it has allowed the Roman Catholic radio station to resume broadcasting.

Reagan said that the government’s measures to end censorship are “a good beginning.” The next steps, he said, “are obvious:”

“Open up the jails and let the thousands of political prisoners free; let the exiles come home; allow freedom of worship, free labor unions, a free economy. And last but not least, send the Soviets and the Cubans home.”

“We’ll not be satisfied with mere show,” he said. “Until these conditions are met, democratization will be no more than a fraud. And until they’re met, we’ll press for true democracy by supporting those who are fighting for it.”