Citing on estimated 500 deaths caused by fires from cigarettes igniting furniture, the staff of a federal agency yesterday called for tough flammability standards for the upholstery industry.

The staff of the Consumer Product Safety Commission estimated that meeting the proposed fire standards would increase the price of a sofa by $6.60 to $10.

The estimated total cost to the industry annually is between $57 million and $87 million, while the total increased cost to consumers will be $114 million to $174 million.

The staff pointed out, however, that economic losses from fires involving upholstered residential furniture total an estimated $540 million annually from death, injury, and property damage.

The American Textile Manufacturers Institute attacked the proposed rule, which it said would "ban from the marketplace 50 percent of today's most popular fabrics - natural cotton, linen, rayon."

The CPCS staff, however, said that half of all upholstered furniture already complies with the proposed rule - which is a two-test standard used to classify the fabric, filling materials and construction as to degree of flammability.

The standard involves setting down a lit, 85-millimeter nonfilter, king-sized cigarette on some furniture. If the chair is burned more than 3 inches from the point of ignition, it fails the test.

The CPCS staff reported that the upholstered furniture industry has indicated that by the spring of 1979 it will have its own voluntary upgrading of upholstered furniture flammability standards, an action that it said would affect half to products marketed after that time.

But CPCS staffer George Anikis said at a press briefing yesterday that "we do not think the industry has gone far enough . . . they have not even tested certain techniques."

Anikis added, however, that there have been technical improvements in the production of fabric and upholstered furniture in recent years.

The industry had been pressing the CPSC to adopt an industry-written proposed standard instead of the one offered up by the CPSC staff.

That proposal would cut the added cost to consumers somewhat but, according to the staff, it "is not adequate because it does not require fabric or simulated furniture testing."

The CPSC still must consider the staff proposal, which will be presented on Dec. 6, in a public session. On Dec. 20, industry will make its presentation. No date for a commission vote has been set. The proposed rule would not take effect for at least a year after final approval.