A long-running dispute over whether the federal government should crack down on three- and four-wheeled all-terrain vehicles -- involved in about 7,000 injuries a month -- may be reaching a climax.

The popularity of the off-road machines has risen sharply this decade, a growth accompanied by a mounting toll of deaths and injuries. More than 2 million of the vehicles are reported in use in the United States.

The result has been a flood of demands for a ban or recall of the vehicles, two years of studies and hearings across the country by the Consumer Product Safety Commission and a commission recommendation that the Justice Department join in taking action on the vehicles.

Terming the vehicles an "imminent hazard," the commission suggested refunds for owners who want them, and asked the Justice Department to institute a suit against the major manufacturers -- Honda, Yamaha, Kawasaki and Suzuki.

A response from the department has been pending for months, but reports surfaced this week in Congress that a settlement has been worked out among federal officials and makers of the machines. There has been no confirmation by the department or the companies.

Reports from officials have indicated that a news conference had been tentatively scheduled for Dec. 30, but that has not been formalized.

In October, the House Government Operations Committee issued a report charging that the Justice Department had been irresponsible in not acting sooner.

In question are motorized vehicles, most with three wheels and some with four, designed for use on beaches and in woods, on farms and other off-road areas.

Safety experts say the vehicles can be deceptively complex to operate, with the result that as many as 7,000 injuries a month send riders to emergency rooms.

As of Sept. 4, the Safety Commission had recorded 883 ATV-related deaths since 1982. And there had been 63,600 injuries so far this year.

Last December, the Consumer Product Safety Commission called for a voluntary age limit on ATV riders and asked the manufacturers of the machines to stop sales of the smaller ATVs designed for youngsters under age 12.

Industry officials resisted, contending that if they stop making the smaller vehicles youngsters will merely try to ride the larger adult versions, an even more dangerous practice.

As recently as Nov. 3, CPSC Chairman Terence M. Scanlon criticized the ATV manufacturers, accusing them with dragging their feet on voluntary standards for improved safety.

The "reluctance of this one industry to act responsibly, on its own initiative, is unfairly giving the voluntary standards process, to which many other industries have successfully adhered, a bad reputation," he said.

During hearings around the country, the commission heard from outdoors enthusiasts and recreation groups who contended that the federal panel should not interfere with their freedom to use the vehicles.

But most testimony has focused on the danger and calls for government action.

The safety commission has "shirked its responsibility, has dragged its feet and acquiesced to industry's timetable for the development of a voluntary standard," Mary Ellen Fise of the Consumer Federation of America told a House Commerce consumer protection and competitiveness subcommittee.

Dr. Mark D. Widome of the American Academy of Pediatrics has expressed "dismay" that the vehicles are still being sold.

"How many more children must we see die, must we see suffer brain injury or permanent paralysis before measures are taken... . ATVs are not safe," Widome told the subcommittee earlier this year.

Alan Isley of the industry's Specialty Vehicle Institute of America contends that ATVs are safe when ridden properly.

"Most accidents could be avoided if youngsters are properly supervised, outfitted with safety equipment, do not ride double and ride only on a model suitable for young riders," he said.