PLAINTIFFS IN PANTHER SUIT 'KNEW WE WERE RIGHT'

''At times, when we had to go to court almost daily and when all the decisions were coming down against us, it seemed that we should just give up,'' said William Hampton, reflecting on the 13-year court fight that grew out of the killing of two local Black Panther leaders by the Chicago police.

''But we in the family knew we were right and that the police were wrong, so we kept praying and kept fighting.'' The city, county and Federal authorities recently agreed to a settlement awarding $1.85 million to nine plaintiffs, including the survivors of the police raid and the relatives of the two slain leaders, Fred Hampton, William's brother, and Mark Clark.

The raid, the police said afterward, was intended to seize weapons they believed the Panthers were stockpiling. It was carried out by 14 police officers, some armed with automatic weapons, under orders from Edward V. Hanrahan, who was then Cook County State Attorney.

F.B.I. Played a Role

Mr. Hanrahan and his raiders acted on information supplied by the Federal Bureau of Investigation, which had placed an informer in the Chicago Panthers chapter.

''The settlement is an admission of the conspiracy that existed between the F.B.I. and Hanrahan's men to murder Fred Hampton,'' said G. Flint Taylor, an attorney for the plaintiffs, who worked on the case for years. ''The case may be almost over in the legal sense but it will live on as a reminder to people of how far the Government can and will go to supress those whose philosophies it does not like.''

Robert Gruenberg, an Assistant United States Attorney who represented the Government in the case for the last two years, said the settlement was not an admission of any guilt or responsibility, but was intended to avoid another costly trial.

Mr. Hanrahan, who is now a private lawyer in Chicago, did not answer phone calls to his office. 1969 Gun Battle Recalled

On Dec. 4, 1969, in what the police described as a fierce gun battle with the Panthers, nearly 100 shots were sprayed through the apartment on Monroe Street in an impoverished black neighborhood on the city's near West Side.

But an examination by ballistics experts determined that only one of the bullets was fired from a weapon belonging to one of the apartment's occupants. In addition, the experts said, the ''bullet holes'' in the front door, which the police said showed that shots had come from within, had actually been made by nails used by the authorities in an effort to cover up the facts of the raid.

Subsequent investigations by Congress and a Federal grand jury indicated that the F.B.I. had played a significant role in events leading to the raid, as part of its counterintelligence program against groups that J. Edgar Hoover, the bureau's director, perceived as ''subversives.''

F.B.I. documents, made public as part of the Panthers's suit and other court cases, indicated that the aim of the program, known as Cointelpro, was to ''expose, disrupt, misdirect, discredit or otherwise neutralize the activities of black nationalist hate type organizations and groupings, their leadership, spokesmen, membership and supporters, and to counter their propensity for violence and civil disorder.'' Attempt to Disrupt Groups

Toward that end, the agency sought to create factions within the Black Panther Party and to stir up antagonism between it and other groups.

For example, bogus letters bearing European postmarks were sent to two leaders of the national Black Panther Party, Eldridge Cleaver and Huey P. Newton, asserting that each sought to depose the other.

Agents in the Cointel program also were encouraged to use ''aggressive and imaginative tactics'' to prevent ''the rise of a 'messiah' who could unify and electrify the militant black nationalist movement.''

Fred Hampton, the 20-year-old leader of the Chicago Panthers, was deemed by the bureau to be a potential 'messiah' as the Black Panthers nationally became a focus of the bureau's antisubversive efforts.

The agency's informer, who was identified in court proceedings as William O'Neal Jr., joined the Panther's Chicago chapter at the behest of his Federal contact. He became the group's chief of security, third in command of the organization.

According to court testimony, Mr. O'Neal frequently came up with plans considered farfetched even by extremists, such as protecting the group's Madison Street office with electrocution devices, gas switches and nerve gas booby traps. He also devised an ''electric'' chair that members were told would be used for traitors or informers.

As an F.B.I. informer, Mr. O'Neal dutifully reported these proposals as coming from other Panther officials. Informer Provided Floor Plan

Mr. O'Neal also provided the Federal authorities with a floor plan of the Monroe Street apartment in which Mr. Hampton and other members lived. The bureau made the plan available to Mr. Hanrahan and the local police authorities, who used it in planning the raid.

Despite the ballistics evidence that all but one of the shots were probably fired by the police and its own findings that the police may have falsified reports on the raid, the first special Federal grand jury that investigated the incident returned no indictments.

A subsequent special grand jury, however, indicted Mr. Hanrahan and the police officers who took part in the shootings, but these were dimissed.

In 1970, survivors of the raid and relatives of the slain Panthers filed a $47.7 million suit against Mr. Hanrahan and 28 city, county and Federal officials, charging the Panthers's civil rights were violated in the raid. 18-Month Trial in 1977

After an 18-month trial in 1977, Judge Joseph Sam Perry of Federal District Court dismissed the charges against 21 of the defendants before sending the case to the jury. The panel deadlocked on the question of liability of the remaining defendants and Judge Perry directed not guilty verdicts for them.

Two years later, the United States Court of Appeals ruled that the Federal Government had obstructed the judicial process by withholding important information and reinstated the case against 24 defendants. The settlement was subsequently agreed to by Federal, Chicago and Cook County officials.

''Now that it is about over, we feel a sense of relief,'' said Mr. Hampton, a 35-year-old teacher. ''The settlement won't bring back those lives but it does show that people should continue to fight injustice regardless of how long it takes.''