The Intergate Co. Inc., a Virginia developer, is planning a massive residential project on as many as 3,500 acres of land that would nearly surround the small community of Round Hill and would challenge restrictions on development in the rural western half of Loudoun County.

Details of the planned development, which officials said may include as many as 6,000 houses and would be the largest single residential project in Loudoun County, have not been publicly announced. Nevertheless, word of the project has spread among the 500 residents of the town and has caused a furor.

"It raises the whole question of whether rural Loudoun can develop with low residential density that is compatible with agriculture," said Peggy Maio, a resident of the Round Hill area and an environmental lobbyist. "I think this will be another one of those landmark cases which really requires our county officials to make some basic decisions about Loudoun's future."

Before any such decisions are made, Intergate executives must meet with town officials and submit an application to the county planning commission. Ultimately, the project must win the approval of the Loudoun County Board of Supervisors.

No application has yet been filed, and officials say approval of such a project could take several years.

The Intergate proposal may be the acid test of whether Loudoun will severely limit residential development in the western half of the county, an area of tall grass, rolling hills and lush farmland, or yield to the pressures of business growth and the right of landowners to sell.

Development is pressing westward more quickly than many in Round Hill ever envisioned.

"I was born and raised in Alexandria and came out to the county 17 years ago to get away from the rat race and raise my family," said Round Hill Mayor Jeff Wolford. "I think people in the area perceive this is going to change."

Much of Northern Virginia, including the eastern half of Loudoun, has already experienced such change. Several large commercial and residential developments, including Xerox Corp.'s 2,200-acre Lansdowne project, have been approved or proposed along the Rte. 7 corridor in the county's eastern section. Clusters of three and four houses already are appearing on agricultural land in the Round Hill area.

But at least one county official said he believes there is little chance a high-density residential housing proposal would be approved by the county's Board of Supervisors. "I have no reason to believe they would stray from the rural plan," said Milton Herd, chief of comprehensive planning for Loudoun County. "But then this is a rapidly changing area."

About 18,000 applications to build dwellings east of Leesburg currently are before the county's planning commission. Frederick T.D. Carr, director of planning, zoning and community development for Loudoun, said 30,000 homes will be built there in the next 25 years. So far, about 82 percent of all residential development has occurred east of Leesburg, with 18 percent west of Leesburg, but virtually none in the Round Hill area.

Intergate is a private development company based in Sterling. Its president, Jerome C. O'Connell, a Virginia attorney and former mortgage banker, and vice presidents John Andrews and Steve Hubert are already well-known in the area, having developed major projects in the county's eastern half.

Intergate is building Loudoun Gateway Center, a 200-acre office park a mile north of Washington Dulles International Airport; BeauMeade Corporate Estates, a 648-acre office and industrial park near Sterling; Ashburn Farms, a 5,000-unit planned residential community in eastern Loudoun County, and several other projects. The company has teamed with William A. Hazel Co., Lerner Enterprises, Tower Construction, Milton Co. and Jack Bays Inc. on other development projects.

Although Intergate hasn't disclosed its plans for the area yet, Round Hill residents have discovered that the company has purchased options to buy 2,700 acres.

O'Connell confirmed that his company has signed agreements to buy 2,700 acres subject to development feasibility studies. The company has also been trying to purchase an additional 800-acre tract, but so far without success, he said.

O'Connell said the density of residential housing envisioned by Intergate is "still totally up in the air." Despite such assurances, some residents are reacting with alarm.

"I'll be damned if I want to see a 3,500-acre tract of land all of a sudden become a community," said Bill Ray, a Loudoun planning commissioner and longtime resident of Round Hill, at an impromptu afternoon meeting at the dairy farm of Supervisor James F. Brownell (I-Blue Ridge) at which they discussed the issue.

"It was the worst thing that they didn't talk to the public," said Round Hill Mayor Jeff Wolford. "Individual people will develop a picture of their own {of the project}, and it will look like hell."

Brownell said the developer has told him the project could be as large as 3,500 acres of land, with as many as two houses on each acre. However, O'Connell said the development would total about 3,000 acres.

Town officials said it was their understanding that as many as 6,000 houses could be built, but O'Connell would not confirm that number.

"They are talking about a Reston-type thing," Brownell said. "This is a major change, and on the face of it, it is not going to be accepted. They are not going to get any cooperation out of myself or other elected officials and staff until they've bounced this off the people first."

O'Connell agreed that the land under contract would "probably" need rezoning, but said Intergate does not plan to build a project with a density similar to Reston's.

Brownell insisted that Intergate's plans "fly right in the face" of the Round Hill area development plan that is pending before the board. The plan, which residents and officials spent seven years drawing up, provides for a maximum of one house on every three acres of land outside a 700-acre area immediately surrounding Round Hill. Within that area, as many as two houses could be built per acre.

The Round Hill plan dovetails with a Loudoun County rural management plan meant to discourage rapid development in the rural and mainly western parts of Loudoun, while encouraging growth in areas where proper water and sewage facilities already exist, mainly east of Leesburg.

"Clearly it has to be seen as a test case," said Supervisor Thomas Dodson (D-Mercer). "If we have a proposal of that magnitude . . . several of our policies {aimed} at trying to preserve an agricultural base would have to go out the window, and I don't see that happening."

Intergate representatives plan to meet with town residents and officials immediately to draw up a list of the town's requirements for approval, O'Connell said. "If they say we want some housing for our children who can't afford to buy in this county or our parents who want to come here, I'll write it down," he said. Any development would be structured to preserve open space and the town's rural character, he said.

But Intergate's plans could wreak havoc with water and sewage facilities that are already hard pressed in the western part of the county and exacerbate transportation problems along clogged Rte. 7, while beginning the farming community's slide into oblivion, critics say.

For one thing, the town's population would balloon to 30 times its current level, with as many as 15,000 people living in 6,000 homes, said Wolford. That in turn would further add to traffic congestion along Rte. 7. As it is, the Virginia Department of Transportation has moved up by two years, to 1989, the schedule for constructing a Round Hill bypass off Rte. 7 to ease traffic congestion.

The town, with about 150 houses, has enough existing sewage capacity to serve the needs of about 800 dwellings within the urban service area but has barely enough water capacity to serve the current residents. "There isn't enough capacity for either water or sewer" when it comes to a big development, said Herd.

To a large extent the debate over land use in western Loudoun County is tied to romantic notions of rural life and farming.

"If Loudoun's rural land begins to develop with large subdivisions, then the farm economy will be in jeopardy because many operations are interrelated," said Maio.

Al Cosby, president of the Coalition for Loudoun, a land-use watchdog group, said "Some people sell hay and grain to horse farms, and its back and forth. I sincerely believe horse farms will fail" if the rest of the farmland is developed. "You have to have hay for the horses."

Nonetheless, it is the farmers who are often enticed into selling their land.

A.F. Horning, a corn and cattle farmer who owns 129 acres just south of Round Hill, has twice turned down Intergate offers. He said, however, that he is tempted by a third offer. At $10,000 per acre, it is double the previous offer.

"I might take it later on," he said. "Everything is so uncertain . . . . But I'm really not interested in selling."

Special correspondent Donna Acquaviva contributed to this report.