To the cheers of hundreds of employees, Interior Secretary Bruce Babbitt vowed Friday to fight a perjury investigation by an independent counsel and predicted "absolute vindication" for himself and his department.

"The times are out of sync and so is the system," Babbitt told a sympathetic audience that greeted him with a standing ovation in Interior's main auditorium. He said he has been tempted over the past few months "to say the hell with it . . . I'm going home," but not anymore."I'm here. I'm going to fight this out to the bitter end, and we will be vindicated," he declared.

Attorney General Janet Reno asked Wednesday for appointment of an independent counsel to determine whether Babbitt lied to Congress last fall about his handling of a proposed Indian gambling casino.

Tribes opposed to the Hudson, Wis., casino project, which was rejected by Interior in July 1995, contributed more than $350,000 to Democrats for the 1996 campaign and launched a full-scale lobbying drive aimed at securing the Interior Department's decision.

Reno's petition is awaiting action by a special panel of three federal judges who will name the outside counsel and have the final say on the scope of the investigation. It will be the first to grow out of alleged fund-raising abuses by the Clinton-Gore re-election effort.

Babbitt's 15-minute meeting with employees Friday in the 750-seat auditorium was billed as an occasion to "address concerns" they might have about the investigation and lay out his plans for the coming year "to further enhance the administration's environmental and cultural resources agenda."

The House Government Reform and Oversight Committee headed by Rep. Dan Burton, R-Ind., recently concluded two weeks of hearings on the casino controversy with GOP calls for an independent counsel with a broader mandate than Reno recommended. Republicans contend the decision to reject the casino was improperly influenced by the prospect of Democratic campaign contributions from opposing tribes and by pressures from White House and Democratic Party officials.