The chief of the U.S. Army Corps of Engineers has recommended approval of a controversial oil refinery in Portsmouth, Va., which would be the largest such facility on the East Coast.

Lt. Gen. John W. Morris took the action in forwarding the refinery's application for a channel dredging permit to Secretary of the Army Clifford Alexander, who will make the final decision in the case.

The permit is the last needed for the proposed $660 million refinery, which would process 175,000 barrels per day of Middle Eastern oil near the waters of the James River oyster and the Chesapeake Bay blue crab.

Environmental groups have charged that potential oil spills from refinery-bound tankers would create an unacceptable hazard for marine life in the Chesapeake Bay, a charge denied strongly by the refinery's supporters.

The environmentalists have charged further that any approval of the refinery application by Alexander will be countered with litigation that could stall the project for years.

John K. Evans, president of the Washington-based Hampton Roads Energy Co., which wants to build the refinery, said he expects a reasonably prompt decision from Alexander. "The engineers have studied this thing right down to the commas," he said. "They've held the damn application for three years."

He said any group suing to stop the refinery would be met by a countersuit for damages, either from the energy company or from pro-refinery labor unions in job-hungry Portsmouth.

Those opposing the refinery include the Depart of the Interior, which last January called on Alexander to block the project because its location was "one of the worst in the United States."