Argentina's ranking nuclear physicist denies his country has designs on the bomb

As he moves confidently through the imperial grandeur of the Hofburg Palace in Vienna, the admiral is a trim figure in a dark gray civilian suit, carrying an unobtrusive brief case.

He looks little different from the other diplomats and scientists attending the annual conference of the United Nation's International Atomic Energy Agency (IAEA).

Yet Carlos Castro Madero of Argentina symbolizes both the strengths and the weaknesses of the UN's effort to stop nuclear weapons from spreading around the world.

Many experts see this effort - to prevent such leaders as Libya's Col. Muammar Qaddafi, and such beleaguered states as Israel and South Africa from ''going nuclear'' - as one of the most important cooperative ventures on earth today.

Inside Castro Madero's briefcase are documents that both support the United Nations efforts and spotlight the reasons it still faces stiff obstacles.

As he shakes hands and sits down for a talk outside the conference hall, Castro Madero is an unusual blend of professional military man (an admiral of the fleet), diplomat (Argentine ambassador to the IAEA), professor (at the national military school for the Navy and at the universities of Cuyo and Buenos Aires), and nuclear physicist (president of Argentina's Atomic Energy Commission.

He is also a proud man, and intensely patriotic.

He knows the importance of accepting agency safeguards against diversion of fissionable material as a way of gaining international respectability. He does accept a number of them.

He also knows his country is one of several that are constantly suspected of wanting to build a nuclear device because they refuse to sign the nuclear Non-Proliferation Treaty.

The issue, to him, is national sovereignty. ''It is our right,'' he says firmly, ''to make our own national decisions. No one can do that for us. [Former President Jimmy] Carter tried to order us to accept full IAEA safeguards even on nuclear facilities we built ourselves. He tried to dictate to us through the American Non-Proliferation Act of 1978. We rejected that.''

The same reasoning leads him to aspire to building a complete nuclear fuel cycle free from foreign inspection - free, as he has put it in the past, from ''scientific and technological colonialism.''

Because Argentina is unstable politically, because it has lost a spectacular armed clash with Britain to regain the Falkland Islands (which the admiral smilingly insists on calling the Malvinas), and because it is one of the two giants of South America (it is constantly vying with Brazil for influence and prestige), diplomats in other countries keep watching for signs that it is yielding to the temptation to reap the prestige of exploding a nuclear device.

In some ways, Argentina is well on the way to an independent nuclear fuel cycle.

It doesn't need to import natural uranium, since it has some 25,000 tons of its own. It processes the ore itself and makes its own reactor fuel rods.

The Reagan administration agreed earlier this year to allow 143 tons of heavy water originally made in the United States to be transhipped to Argentine reactors from West Germany. The admiral says Argentina has actually bought only 38 tons. It is leaving the rest as potential reserves.

But in other ways, Argentina's nuclear activities are closely monitored by IAEA cameras and officials. For this reason, IAEA officials dismiss a Central Intelligence Agency report that Argentina may be about to divert plutonium into a bomb.

Safeguards come under terms of construction and service contracts with Siemens of West Germany (which built the Atucha I reactor near Buenos Aires) and the Canadian government (the Embalse plant in the north central area of Rio Tercero).

A third plant, Atucha II, is to be put up by Kraftwerk Union of West Germany, again under safeguards.

''We accept safeguards against diversion of fissionable material on all technology we import,'' the admiral says calmly. ''Yes, we make our own fuel rods, but as soon as they go into our reactors, they are under safeguards. . . .

''It's true we are building our own plant to reprocess (extract) plutonium from spent fuel rods. We asked for help with this plant from a number of countries, but they denied us.

''Secretly to get plutonium from spent rods, however, we'd have to irradiate them in a plant we had built ourselves. . . . We're not doing so. . . .''

US experts say that inflation and other obstacles have pushed the completion date for a reprocessing plant near Ezeiza International Airport back to about 1990.

What the admiral will not accept is international inspection of facilities Argentina builds itself.

''We are a sovereign country,'' he said there in the Hofburg Palace. ''No one can tell us what to do. . . .''

Unspoken but implicit: ''One day we may need nuclear weapons, unlikely as it seems today, and we're not foreclosing that option now.''

Meanwhile, the admiral lists the reasons he thinks the critics are ''misguided'' in thinking he wants a bomb tomorrow:

A detonation, or the hint of one, would alienate Argentina from its neighbors , cause Brazil to jump into a nuclear arms race, force Canada and West Germany to stop all servicing and spare parts on the three local reactors, and alarm nuclear-club-member Britain anew over intentions toward the Falklands.

An aide whispers in the admiral's ear. Another annual conference session calls him. The admiral-ambassador-physicist rises, shakes hands again, and is gone.

''He's not building a bomb,'' says an agency source a few minutes later. ''But he won't give up the option, either. . . .''