Industry representatives yesterday praised a White House package of policies governing biotechnology -- the manipulation of living cells to create innovative products -- saying the rules will help spur the development of the young industry.

The package, which seeks to clarify and coordinate the way individual regulatory agencies treat biotech research and products, will remove the uncertainty that has troubled companies and investors, while improving public confidence in the safety of the new technology, according to representatives of biotech firms and trade associations.

"This is a giant step forward," said Richard D. Godown, executive director of the Industrial Biotechnology Association (IBA). The rules were developed during the last two years and were approved by President Reagan earlier this week.

The package was developed in response to the confusion that arose about two years ago when the first products of biotechnology emerged and companies were unclear about which federal agencies would review their work and what requirements would be imposed. Much of the confusion arose from the wide application of the new technology across a range of industries, including agriculture, animal husbandry, medicine, food processing, chemicals and energy.

The framework makes it clear that the Food and Drug Administration will continue to regulate food additives and pharmaceutical products, the Environmental Protection Agency will continue to monitor pesticides, the Department of Agriculture will continue to be responsible for plants and animals and the Occupational Health and Safety Administration will continue to oversee the safety of the technology in the workplace. The National Institutes of Health, the National Science Foundation and USDA will continue to watch research conducted with their funding support.

"This is a framework for regulatory certainty," said Leonard J. Guarraia, director of regulatory affairs for Monsanto Co. of St. Louis, which is developing a pesticide by mixing the genes of two bacteria. "We need public confidence and will have it only if tough, scientific-based regulation is imposed."

Biotech critic Jeremy Rifkin said, however, that the policy package attempts to deregulate biotechnology by allowing certain classes of genetic engineering work to be exempted from regulatory review.

The package exempts some work with "regulator genes," which control the activity of other genes and groups of genes, and also exempts some deletions of genetic material from nonhazardous microorganisms. David T. Kingsbury, chairman of the White House's Biotechnology Science Coordinating Committee, yesterday said that these exemptions are very narrow and would not have affected any of the experiments already approved.

Rifkin also criticized the policy package for not addressing risk assessment, the methodology for predicting the risks posed to the environment by the release of genetically altered living organisms. Rifkin contends that the scientific tools have not been developed to measure the risks; the government and the biotech industry contend that the methods exist to review products on a case-by-case basis.