LANSING, Mich. (AP) _ A newspaper should not be found guilty of libel because it accurately reported a man's arrest as a rape suspect even though he was never formally charged, an attorney argued Wednesday before the Michigan Supreme Court.

But the man's attorney contended that the Battle Creek Enquirer had the responsibility to make sure the story was fully truthful, and claimed his client had seen the ''almost total destruction'' of his personal reputation because of the arrest story.

David J. Rouch was arrested Dec. 21, 1979, as a suspect in the knifepoint rape of a 17-year-old girl. He was released about eight hours later when the Calhoun County prosecutor's office, which had authorized the arrest, refused to issue a warrant.

The Enquirer reported the arrest the next day, based on police department information. Rouch passed a lie-detector test, and another suspect was charged four months later.

Rouch filed suit Dec. 2, 1980, seeking damages for libel. The next day, the Enquirer printed a retraction of the arrest story.

Calhoun County Circuit Judge Stanley Everett dismissed the lawsuit after concluding that the newspaper was entitled to report an arrest of general public interest and that Rouch failed to prove the newspaper showed actual malice.

The state Court of Appeals overturned the ruling in 1984, saying newspapers are open to libel suits if they report details of an arrested person's alleged crime before the suspect is charged formally.

''The newspaper accurately reported what the police did,'' said Robert Bernius, attorney for the Enquirer. ''It is true he was arrested.''

Bernius argued the paper was protected against a libel charge because it accurately reported an official proceeding.

Rouch's attorney, John Jereck, argued that ''the only truthful fact in the article is the fact he was arrested,'' and argued the paper should have delayed publishing until it had the full story correctly.

''There was no urgency ... there was no competing newspaper in Battle Creek to scoop them,'' he said.

''What we have here is plain reckless journalism,'' he declared. ''We have people running around with a constitutional gun ... and they fire at will.''

Jereck acknowledged Wednesday that Rouch waited 11 months before seeking a retraction, and said there was no indication the paper knew the charges against Rouch had been dropped and another man arrested.

Bernius said a decision in favor of Rouch would have broad effects on reporting of crime news.

''If the Court of Appeals is upheld it will cast a veil of secrecy on the criminal process in this state,'' he said.

''If the police are convinced enough to arrest a person, that information is sufficient to base a newspaper story on,'' Bernius said. ''The prosecutor had authorized this arrest in advance.''

''If there is any fault at all ... it is the fact there was no follow-up article'' about Rouch being cleared, he told the justices.

It could be months following Wednesday's oral arguments before the high court before a decision is announced.