THE Prime Minister has been asked by Edinburgh District Council to

intervene directly to secure a #2 billion radar contract for the

European Fighter Aircraft project for the city's Ferranti operation.

Leader of the Labour administration Councillor Mark Lazarowicz, has

asked Mrs Thatcher to make the move on behalf of Edinburgh's major

industrial employers after West German refusal to accept a majority

decision by its European partners to award the contract to a

Ferranti-led consortium.

Last week Ferranti announced 400 redundancies at its five plants in

Edinburgh due to a downturn in trading, and now Councillor Lazarowicz

says: ''The loss of this contract could result in disastrous employment

consequences in the city.''

There are fears in Edinburgh that Britain may be prepared to accept

German objections to the Ferranti radar system to keep the whole of the

#22 billion project, Europe's biggest collaboration on defence, alive.

British Defence Secretary Mr Tom King met his West German counterpart

Gerhard Stoltenberg last week and it was agreed to re-examine the radar

contract. Either the Germans would fit their own radar to the aircraft

or they would upgrade their own MSD 2000 system for the project.

However, as Councillor Lazarowicz stressed in his appeal to the Prime

Minister, Ferranti's ECR 90 radar won the contract ''by significant

margins on both technical and cost grounds.''

The loss of the contract would not only affect Ferranti and its 8000

employees in Scotland, but also the whole of the Scottish electronics

industry as the EFA contract would maintain a lead in European military

radar tech- nology for the next decade.