President Reagan has raised the possibility that the United States might take military action against the Libyan plant.

American officials have said that a West German company helped design and build the Libyan plant.

According to classified intelligence reports, the Libyan plant began producing small amounts of mustard gas late in 1989.

The Administration's reversal on the status of the Libyan plant was a clear embarrassment to the American intelligence community.

American diplomats have complained to West Germany and other nations for several months about companies involved in the Libyan plant.

American intelligence can monitor factories like the Libyan plant in a variety of ways, including satellite photography.

"The United States has provided interested countries information available to us" on the Libyan plant, she said.

Administration officials say they have intelligence indicating that the Libyan plant has produced small amounts of chemical weapons.

The company has been named as supplier of such equipment for the Libyan plant.

One senior Administration official said there was "considerable evidence" that the Libyan plant was a chemical installation.