EAST BERLIN, Thursday.

EAST Germany's Communist Party said today it was launching an

investigation into the misrule of ousted leader Erich Honecker, a

possible prelude to his expulsion from the party.

The Central Control Commission, responsible for internal party

discipline, said the party had also expelled former Politburo member

Guenter Mittag, a Honecker associate who was in charge of the economy

until he was sacked last month.

The measures were announced on state television shortly after the

country's new coalition Government said it was cracking down on

smuggling of food and consumer goods which has boomed since the

authorities allowed free travel to the West two weeks ago.

Government spokesman Wolfgang Meyer said the restrictions, which will

take effect tomorrow, were intended to stop East Germans and foreigners

from buying cheap goods in East German stores and taking them for resale

at a profit in West Germany.

Honecker, 77, was dismissed as party leader on October 18 after ruling

with an iron hand for 18 years.

He was replaced by Egon Krenz, who bowed to relentless public pressure

for political reform, threw open East Germany's borders and paved the

way for reformist Prime Minister Hans Modrow to form a coalition

Government with four small non-Communist parties.

The party said it was investigating Honecker, Mittag and a third

official, Hans Albrecht of the southern region of Suhl, because they had

violated party rules and bore responsibility for the current condition

of East Germany.

The party said Honecker would not have to face questioning from

disciplinary officials because his health was too poor. Honecker

underwent a gall bladder operation shortly before he was deposed as

party leader.

A formal investigation into the actions of a senior official is often

the prelude to his expulsion from the party. Krenz and the new party

leadership have made clear they want to dissociate themselves from the

policies of the Honecker era.

Mittag, 63, was the highest-ranking official to be expelled from the

party in East Germany's current unrest. He became a full member of the

Politburo in 1966.

Party officials have accused Mittag of mismanaging the economy,

concealing the truth from the public and committing serious violations

of party rules. He was sacked from the policy-making Central Committee

on November 10.

* A small Communist-allied political party today took advantage of the

new atmosphere of free public discussion under Krenz and said East and

West Germany should consider creating a German confederation.--Reuter.