THE ICAC, in an effort to justify expenditure increases, is warning of a wave of corruption among law enforcement agencies. It is also claiming the need to defend the Independent Commission Against Corruption's image in the face of public concern about rampant graft. The estimates pledge that the Operations Department of the ICAC will step up attacks on both the public sector and private sectors by fulfilling an ''urgent'' need to improve intelligence gathering. Links with Chinese authorities will also be stepped up. ''There are worrying indications, particularly in the disciplined services, that groups of officers are reverting to corrupt practices not recently seen,'' the commission notes under ''matters requiring special attention''. As a result, the 880-strong Operations Department is to fund an extra 40 investigators through a request for an extra $17.5 million in the net financial year, taking its expenditure to $324.7 million. The department eats up the bulk of the commission's total expenditure estimate of $446.2 million - up $28.6 million or 6.8 per cent on the 1993/94 financial year. The estimates note a more than 40 per cent increase in corruption reports in the 12 months from mid-1992, from 2,276 to 3,284, leading to a similar rise in on-going investigations, now standing at a record 1,375. Convictions more than doubled during the period from 184 to 469. In other areas, an extra $5.2 million is being claimed by the Community Relations Department in the $41.8 million set aside for preventive education, an increase of 14.2 per cent, some of which spent to shore up the ICAC's ''strong and robust image'' dueto ''public concern over possible deterioration of the problem of corruption''. ''It is of paramount importance to reassure the public that the commission is fully in control of the corruption situation and to foster their confidence in and support for ICAC work in the run-up to 1997 and beyond.'' Much of the money is expected to be taken up with the provision of an extra 30 staff as recommended by Governor Chris Patten last October to formulate codes of conduct and ethics for businesses. The police, meanwhile, have fielded a more sober approach, posting Budget estimates increasing by a below-average 2.5 per cent rise to $8.209 billion. The force is promising enhanced beat patrols in urban areas while pledging to extend its role in developing areas, especially in the New Territories and on North Lantau to match the progress of work on the new airport. The estimates also promise intensive investigation of ''previously impenetrable areas'' of criminal activity due to the predicted enactment of the Organised and Serious Crimes Bill and the Computer Crimes Bill, which will also require action on the recommendations from Mr Justice Kempster's inquiry into improved witness protection.