An environmental group opposed to using genetically altered organisms outside laboratories is trying to use the federal courts to impose stricter government controls on private genetic engineering companies.

In a potentially precedent setting lawsuit, the Foundation on Economic Trends has urged the U.S. District Court here to make private companies obtain federal approval of experiments that release genetically altered organisms into the environment.

The foundation also contends genetic research companies should be required to prepare detailed evaluations of the environmental effects of any experiments that use genetically modified organisms outside laboratories.

Companies now do not need the approval of the National Institutes of Health for genetic field tests, nor do they need to comply with the National Environmental Policy Act, which requires government agencies to assess the environmental impact of any major decisions.

The lawsuit is part of an effort to force greater federal regulation of private companies that hope to develop new products by changing the genetic makeup of animals and plants.

The foundation is headed by Jeremy Rifkin, a environmental author and activist who has organized the major challenge to biotech research.

The National Institutes of Health plans to oppose Rifkin's lawsuit and says it will file its legal arguments on Friday.

One institute director said the stricter requirements "could be a real inhibition" to some private genetic engineering firms.

Industry executives contend Rifkin's foundation has a "fairly weak legal argument," said Harvey Price, executive director of the Industrial Biotechnology Association.

Business would find it "very difficult" to comply with NEPA's procedural requirements, Price conceeded. Rather than prepare lengthy environmental assessments, genetic engineering companies could simply refuse to seek NIH approval for some experiments, he said.

In May, the foundation successfully sued to prevent the first release of a genetically altered microbe in a federally financed university experiment.

But the court decision said a private company could conduct the identical experiment, which involves a microbe genetically engineered to inhibit the growth of frost on potatoes.

Daniel D. Adams, president of the genetic engineering firm that wants to conduct the potato frost experiment, said the foundation's argument is "total legal nonsense" and could "screw things up" in the short-run for some genetic engineering firms.

District Court Judge John J. Sirica granted a preliminary injunction blocking NIH from approving the experiment because NIH had not documented a sufficient review of the environmental effects.

Federally funded researchers must obtain NIH permission to release genetically altered organisms, but private companies follow NIH guidelines on a voluntary basis. Therefore, Sirica said, federal environmental requlations do not apply to NIH's review of private release experiments.

The foundation now has asked Sirica to amend his opinion to bring private firms under government environmental requirements. It contends private firms must comply with Environmental Policy Act because they utilize a patent license that requires them to meet NIH guidelines. Virtually all companies that use recombinant DNA techiniques use a patented process developed by the University of California and Stanford University. All licensees to the patent agree to comply with NIH's guidelines for conducting recombinant DNA research.

The foundation argues that the patent compels private firms to obtain NIH approval or lose "their right to perform such experiments." Private firms, therefore, must also satisfy NEPA's requirements to obtain approval, the foundation says.

NIH argues that the patent, which was developed with NIH funds, does not cover experiments involving the deliberate release of genetically altered organisms, said Bernard Talbot, acting director of the National Institute of Allergy and Infectious Disease, which oversees NIH's recombinant DNA advisory committee. Private companies do not need NIH approval to conduct such experiments and therefore the environmental policy law does not apply, Talbot said.

Advanced Genetic Sciences Inc., a Greenwich, Conn., company that partially paid for the university's potato-frost experiment, wants to perform the experiment itself and has voluntarily asked for NIH approval.

AGS is a licensee to the special patent, but considers itself exempt from NEPA's requirements and plans to perform the experiment if it is approved by NIH, said Adams, chief executive of the firm.

The NIH advisory committee has recommended approval of AGS's request, but the director of NIH will not make a final decision for about a month, Talbot said. NIH is currently conducting an environmental assessment of the original university experiment, and will address AGS's request after the assessment is completed.