In the wake of overruling its own peer panel and denying grants to four performance artists two weeks ago, the National Endowment for the Arts yesterday issued guidelines meant once and for all to define what it considers obscene.

As defined by its statement, the NEA now interprets obscenity in the light of the Supreme Court's 1973 Miller v. California decision, which considers a work obscene when an average person applying contemporary community standards finds it appeals to the prurient interest, when the work depicts or describes sexual conduct in an offensive way, and when it lacks serious literary, artistic, political or scientific value.

The new guidelines were immediately criticized by some in the arts community as not clarifying the issues. They differ significantly from the language that grant recipients this year have been asked to sign, which states that no endowment funds may be used "to promote, disseminate or produce materials which in the judgment of the NEA ... may be considered obscene, including, but not limited to depictions of sadomasochism, homoeroticism, the sexual exploitation of children, or individuals engaged in sex acts ... which taken as a whole, do not have serious literary, artistic, political or scientific value."

It was unclear whether the new guidelines cancel the more specific prohibitions of the old language.

The new guidelines were issued as Congress gears up for a floor fight on the endowment scheduled for July 19, and in the light of a pending suit brought against the NEA by the New School for Social Research in New York federal court. The suit asks that the endowment stop requiring grant recipients to sign the anti-obscenity pledge that accompanies each grant this year.

Constitutional lawyer Floyd Abrams, who represents the New School in this suit, said "the effect of the new guidelines is not so much to clarify as to confuse. It is a useful step as any explanation would be which deviates from the language that the NEA now requires its recipients to sign. But it is also a confusing step because it now leaves grant recipients in a situation where they are still asked to sign language which says one thing and simultaneously told that it means something else -- that in effect it will lead to the conclusion that you are misusing government funds if you use money from the NEA to depict certain topics. But the language released today doesn't say that."

Abrams also said that as a part of the ongoing New School suit, he has taken steps to obtain NEA Chairman John Frohnmayer's deposition next week. "It certainly will be useful to put questions to him about precisely what language it is that grant recipients are supposed to be bound by."

Jonathan F. Fanton, the president of the school, was also concerned. "While the NEA statement may appear to be a constructive step away from the palpably unconstitutional language grant recipients have been required to sign, the NEA seems to continue to insist that grant recipients swear to just that language," he said in a release yesterday.

"We believe the obscenity condition, even as now interpreted, will continue to cause grant recipients to avoid producing controversial art for fear it will be seen as coming too close to the line that defines prohibited speech," he continued.

Awaiting the release of the NEA guidelines, the New School agreed on June 12 to an adjournment until July 31. (Earlier this year, the NEA had approved a $45,000 grant for a sculpture garden at the school, but the university argued that it could not accept the money if it had to sign the pledge.)

Yesterday's statement from the NEA also addressed other flash points in the controversy: Grant recipients must continue to agree that they will not use grant funds for obscene materials (as defined by the new guidelines); the endowment reserves its right to flag potentially controversial projects and to decline to fund them; and the endowment will determine on its own, "either through Endowment sources or otherwise" -- rather than in a court of law -- whether a grantee is in violation of the anti-obscenity language.

"This is more complex than it's ever been before," said the New York Shakespeare Festival's Joseph Papp yesterday after reading the NEA statement. "It fundamentally demonstrates that there is no way to come up with language that doesn't impact on the content of the work, and even sets up a way in which people can inform on other people."

As participants on both sides of the argument press on, opinions remain heated.

"The place where obscenity needs to be determined is in the courts -- not in Congress and not by the NEA," said Liam Rector, the executive director of Associated Writing Programs, a Norfolk-based national service organization for programs in writing, and an active commentator in the controversy. "For Congress or the NEA to restate the definition of obscenity as a condition of grant giving can be intimidation and casts the long dark shadow of censorship. It shows how far the terms of the debate have moved from a sane, legal, rational or even constitutional view of things."

In a related development, Rep. Tom Coleman (R-Mo.), the ranking Republican member of the House subcommittee that has first jurisdiction over the NEA funding, released his own suggestions for revamping the endowment's approach to funding, which were first made public in a press conference in Kansas City, Mo., last week. Coleman's suggestions include a reallocation of NEA funds on a 40/40/20 basis (40 percent to the states, 40 percent to the national office of the NEA and 20 percent to be administered in direct grants to state governments or inner city and rural arts programs); a restructuring of the proposed national 40 percent of the endowment budget to focus on art of national and international significance; and establishing a new grant program to promote "development of institutional excellence."