Honeywell Inc., one of the nation's largest manufacturing firms, has agreed to pay $800,000 to settle allegations that it failed to report defects and hazards involving certain gas controls used in its furnaces, space heaters and water heaters, the Consumer Product Safety Commission said yesterday.

The fine against Honeywell, which is based in Minneapolis, is the highest civil penalty in commission history, CPSC spokesman Lou Brott said.

The CPSC said that 22 deaths and 77 serious injuries over the last 20 years have been associated with the defective V8280 family of gas controls and the model V5130 water heater controls used in liquefied petroleum (LP) furnaces, space heaters and water heaters. They are used mostly in rural areas and vacation homes, the CPSC said.

"While Honeywell is paying a high price -- $800,000 -- to learn its lesson, the price tag for the victims was much higher," said CPSC Commissioner Stuart M. Statler. "Some of them are no longer around. This should be a vivid reminder to all other firms to report potential hazards immediately as they're required to do under the law. . . . "

Deaths and injuries were caused when the safety control knob on the device got stuck and didn't work properly. The defective knob allowed raw LP gas to flow into a furnace and the room itself. The gas then could settle in the room and be ignited, causing explosions or fires, said Philip Bechtel, CPSC director of administrative litigation.

Bechtel said that the CPSC, which originally wanted to recall the defective valves, believes that Honeywell knew about them because it had been subject to numerous lawsuits alleging violations, and the firm eventually made design changes in the model.

"We think this was a very serious reporting violation," Bechtel said. "This is a good settlement for the consumer. It sends out a strong message to firms about reporting."

As part of the settlement, Honeywell has agreed to conduct an extensive inspection, repair and warning program.

Honeywell will inspect consumers' homes to replace the gas and water heater controls. At least 400,000 V8280 controls and 900,000 V5130 controls have been manufactured for use with LP gas since 1958. Several hundred thousand of the controls are still on the market, the CPSC said.

LP dealers will receive a $50 reward for locating certain of the hazardous controls in consumers' homes and will earn additional sums for replacing the products involved.

Honeywell has denied that the controls are defective, but it has agreed to replace at no cost all the controls where the knob had been stuck down or was particularly susceptible to becoming stuck. Additionally, LP dealers will place a warning label on every furnace and water heater with the controls.

"We felt the agreement was a major step forward in telling consumers what the potential hazards are in not operating or maintaining the gas valves properly," said Karen Bachman of Honeywell.

The CPSC urged consumers not to try to fix their own controls, but instead to contact their LP suppliers or Honeywell at 800-328-8194.