PRESIDENTIAL counselor Edwin Meese III should seriously consider withdrawing his name from consideration for US Attorney General. This is said with compassion for Mr. Meese, a loyal and close aide to Mr. Reagan for many years, and without prejudging the outcome of a special counsel's inquiry into various allegations against Mr. Meese. The allegations fall generally into four categories: that Mr. Meese or his wife received loans or financial assistance which were not properly reported, that job appointments may have been influenced by the loans, that Carter campaign documents circulated through his hands, and that he received a military reserve promotion he did not merit. Much of this questioned activity occurred before the Reagan administration's official startup.
Mr. Meese is caught between two processes, the legal and the political. The legal, with the Justice Department's asking a three-judge federal panel to name a special prosecutor to conduct a broad investigation, will necessarily move forward to conclusions on the charges. Judgment on all or most of the questions should properly come through this process. The American system's presumption of innocence should be kept in mind.
The political course of Mr. Meese's case follows a different set of forces. As a practical matter, administrations closely watch the public reaction when a nominee or a member of the team gets into trouble. This is no less true even when a president vigorously continues to back the individual, as Mr. Reagan has Ed Meese. A time comes for what is rather callously called ''damage control'' - when an administration tries to preserve its political capital and cut its losses.
Perhaps if Mr. Meese's qualifications for the office were more pronounced and if the set of circumstances he finds himself caught in did not suggest a vulnerable if not culpable approach to responsibilities, Mr. Reagan could be expected to insist Meese tough it out in the political as well as legal arena. Even if more time remained before the presidential campaign heated up, the administration could invest more time in the Meese nomination.
As it is, the nomination has become a lightning rod for rehearsing the list of Reagan administration appointees who have come under clouds, from National Security Adviser Richard V. Allen and CIA chief William J. Casey to Deputy Defense Secretary W. Paul Thayer. Of the dozen or more accused of various improprieties, only Rita M. Lavelle, head of the Environmental Protection Agency's hazardous waste cleanup fund, was found guilty, and then of perjury. This line of attack now mercilessly focuses on Ed Meese.
The overriding responsibility of President Reagan in this matter is to ensure that the Justice Department be headed by an individual not only loyal to him, but able to command confidence on his own that he is qualified to run the highest law-enforcement office in the nation. The current attorney general, William French Smith, wants out. His staff is resigning. The department cannot drift until after the election or to the end of this term.
Mr. Meese can still rightly seek vindication of his reputation if he steps out of line for the appointment at this time.