Already harshly criticized for confusion in its earthquake relief effort in Kobe, the Government is now suffering the embarrassment of reports that Japan's largest organized crime group is running a big operation to provide food and supplies to quake victims.

For the fourth straight day, the Yamaguchi-gumi, a feared group of gangsters based in Kobe, handed out food, water and diapers today to people in its devastated neighborhood. In Japan, organized crime groups operate largely in the open, and the operation, which is said to be more efficient than the Government's, has been a source of pride for the gangsters.

Toshio Masaki, who described himself as the secretary to the crime family's oyabun, or top boss, said in a telephone interview that the group was handing out 8,000 meals a day from a parking lot next to its headquarters. The food includes bread, powdered milk, mineral water and fresh eggs.

He said the group was using motor scooters, boats and even a helicopter to move precious goods into and around the city, which has been nearly paralyzed by the quake damage and dangerously clogged roadways.