CIA Director William Webster says Libya recently experienced a serious toxic spill at chemical weapons production facilities as the country rushes toward large-scale manufacture of mustard gas and nerve agents.

Webster told the Senate Government Operations Committee on Thursday that the spill occurred at Rabta, some 60 miles southwest of Tripoli, but he provided no other details.He said that while such problems are expected to continue, Libya is on the verge of producing a chemical weapons capability far in excess of any realistic military needs, posing the possibility such weapons could be transferred to Middle East nations with past links to terrorists.

Webster based his statements on intelligence estimates.

Webster said the Libyan facility is the largest single factory complex in the Third World capable of producing chemical weapons. Iraq's overall chemical weapons potential is thought to be larger still, he said.

"We are concerned that the plant's production capabilities far, far exceed what Libya could use for its own military purposes," Webster said.

"Therefore it becomes a potential brokering agent for other countries," in the Middle East with links to groups which may have past terrorist intentions, he said. He did not elaborate.

Webster said the Libyan chemical complex is linked to a nearby metal fabrication facility "equipped with the precision materials to manufacture components for a variety of bombs and artillery."

"Other facilities are involved with filling and storing chemical weapons," he said.

Repeating previous U.S. assertions, Webster said West German companies have given Libya extensive assistance to assemble the chemical complex and provide materiel for it.

In a related development, Senate Republican leader Bob Dole of Kansas predicted a "strong American reaction" unless West Germany quickly cracks down on companies helping Libya develop chemical weapons and enacts tough domestic laws to control the export of chemical weapons technology and material.

Dole said he delivered that message Thursday to Wolfgang Schaeuble, chief of staff to West German Chancellor Helmut Kohl, during a meeting in his Capitol office.

"West Germany is among our strongest allies and we can't afford to have this important issue - on which we should share the same view - divide us," Dole said.

Dole is pressing for congressional passage of legislation imposing sanctions on foreign firms which help Libya and other Third World nations develop chemical weapons.

He said firms providing such assistance have been both witting and unwitting about the ultimate nature of the Libyan facility.

Asked why a Western company would knowingly help Libya and other Third World nations achieve a chemical warfare potential, Webster said: "I can only surmise that greed is the explanation."