Rep. James M Shannon's decision last week to run for the U.S. Senate seat being vacated by Sen Paul E. Tsongas (D-Mass.) added another strong contender to a race already crowded with tough candidates.

Political observers note that the entrance of the Lawrence Democrat will make life a little harder for front-runners Lt. Gov. John F. Kerry and U.S. Rep. Edward J. Markey (D-Malden) in the race for the Democratic nomination.

Shannon's announcement last Thursday was quickly followed by an endorsement from Cambridge Congressman and Speaker of the House Thomas P O'Neill Jr. (D-Cambridge). Since his election to the House in 1978. Shannon has been widely regarded a protege of O'Neill.

O'Neill's support will give a substantial boost to Shannon's campaign David M. Irons, director of external affairs for the Kennedy School of Government, notes that the Speaker's endorsement will probably mean major backing from labor political action committees.

One potential problem for Shannon, however, is his age. At 31, some see him as too young and inexperienced to be running for the Senate

But Shannon has overcome similar criticisms before. He captured his current Congressional seat at age 26 just one year beyond the Constitutional minimum for representatives

O'Neill's golden touch has also helped Shannon gain a seat on the prestigious House Ways and Means Committee, an assignment supporters say he has handled like a congressional veteran

Like Tsongas, Shannon has used his office to take liberal stands on national issues, and the voting record he has set should be an advantages in lining up support from predominantly liberal Massachusetts Democrats.

"Jim Shannon is Mr. Liberal's liberal," said Boston pollster and political consultant Tom Kiley

"Markey is perceived as a liberal, yet on defense and abortion he forfeits his natural claim to that position," said Irons.

In a press conference last week. Markey moved to counter his image as an inconsistent liberal. Calling himself a "maverick" and noting that he had changed his votes to support court-ordered busing and federal funding for abortions. Merkey objected to those who cail him a "conservative"

Observers say that Kerry, who is most prominently known for his work on the acid rain issue, has the advantage of statewide recognition. A former Vietnam war hero turned anti was activist. Kerry has never lost a Democratic primary and is known as a skilled debater and campaigner

National Appeal

Kerry's statements last week charging that the Reagan Administration had sacrificed the welfare of the nation's "neediest citizens" for a "bloated" defense budget revealed his penchant for speaking out on national issues.

National issues may well become the focus of the campaign for the nomination