A multiphoton many-body scattering theory is developed to treat the coopera
tive and relaxation processes in laser interaction with matter. This theory
combines Yang's theory of off-diagonal long range order for correlation wi
th Pane's theory on relaxation. Important analytic relations between the "m
edium matrix" and the "scattering matrix" are established in Fano's theory
so that the physical processes can be formulated and their properties compu
ted. A coherent picture emerges in treating the cooperative and competing r
elaxation mechanisms in laser-induced plasma.