The $360 million refitting of the New Jersey at the Long Beach Naval Ship Yard neatly symbolizes the president's desire to increase the strength of the Navy as well as expand the fleet from 460 ships to 600.

Yesterday's event also gave the president a stage from which to tell Congress, which has grown increasingly reluctant to approve his military budgets, that he intends to continue with his five-year $1.6 trillion defense buildup.

"We have no choice but to maintain ready defense forces that are second to none," Reagan said from a podium on the port side of the battleship. "Yes, the cost is high - but the price of neglect would be infinitely higher."

But while the ship served as a convenient symbol for Reagan's commitment to a stronger defense, it also served as a target for the president's critics.

A handful of demonstrators, waving signs that read "Let them eat battleship" and "We build America, not the New Jersey," lined the streets alongside the naval yard yesterday to protest what they called Reagan's "obscene" funding of an increased military budget while making cuts in domestic programs.

In addition, the Navy's program to bring back the battleship has also come under fire from others, like Sen. Barry Goldwater, R-Ariz., who have complained that the huge ships are "sitting ducks" that belong in museums rather than on the high seas.

Nevertheless, yesterday's ceremony belonged to the president, Navy Secretary John Lehman Jr., and their guests, many of whom had served on the New Jersey during fighting in World War II, Korea and Vietnam. Reagan told the estimated crowd of 9,000, who were there by special invitation, that "freedom to use the seas is our nation's lifeblood" and that "maritime superiority for us is a necessity."

He also held out the New Jersey as an example of a weapons program that had been completed both under budget and ahead of schedule.

Yesterday's ceremony will mark the beginning of a fourth career for the New Jersey, which was launched one year to the day after the Japanese attack on Pearl Harbor. But Reagan found a much different ship than the one that was moth-balled just over 13 years ago.

The inside of the Iowa-class battleship, which is just under three football fields long, has been gutted to make way for a new weapons system that the Navy believes will give it the "ultimate edge of high technology."

Instead of trading salvos with an enemy, the New Jersey will act instead as the "platform" for a host of modern offensive weapons - including the cruise missiles and surface-skimming weapons that proved so effective during the Falklands War - as well as the defenses needed to counter enemy weapons of the same kind.

It was Lehman's idea to refit the battleships, but his high-tech salesmanship has been only moderately successful in Congress, which has agreed to pay for similar refitting of another of the battleships but has rejected funds for a third.

Lehman and the Navy argue that the battleship of the past seems to have been designed with the weapons of the future in mind. "It's as it 40 years ago the designers worried about cruise missiles," Lehman said.

According to the Navy, a sea-skimming Exocet missile of the kind used in the Falklands would "literally bounce off" the New Jersey's 17-inch armor-plating. "And we're getting it for $356 million, which is less than a frigate (the navy's smallest ship)," said Lehman.