Two of the nation's most powerful scientific organizations -- the National Academy of Sciences Institute of Medicine and the Federation of American Societies of Experimental Biology (FASEB) -- are locked in a fierce political battle over how the government should spend research dollars. At issue is a proposal over how to spend some money that now goes directly to research on training new scientists and maintaining research labs. In a flurry of briefings, press releases and heated public denunciations, both groups and their supporters have accused each other of "distortion," "hysteria" and worse.

"It's the worst outbreak of nasty talk among the savants in white coats I've ever seen," said Dan Greenberg, publisher of Science & Government Report and a veteran observer of scientific politics. "It's the first time they've ever held press conferences to declare the other guy's an idiot."

The stakes are high and involve how the federal government spends hundreds of millions of dollars from its annual $5.6 billion budget for biomedical research grants.

The struggle pits traditional academic rivals against each other: working scientists in FASEB who feel starved for grant money and scientific leaders in the Institute of Medicine who fear that university research labs are crumbling for lack of upkeep. But many say the latest clash between the two sides portends the increasingly bitter battle for funds from a deficit-strapped government that cannot afford to be as generous in the future as it was in the past.

The current fight started last month when the Institute issued a 250-page report, which called on the government to shift about $12 million a year that now goes to research into training and to rearrange other funds to provide universities with more to repair and maintain aging labs.

But the report came at a bad time for scientists. First, there was the issue of paying for lab upkeep, a touchy subject among researchers that has grown distinctly more sensitive in recent years. Universities can claim a percentage over the amount of a researcher's grant to cover everything from janitorial services to administration, their so-called indirect cost rate. Scientists have always felt that universities claimed too much.

But the subject has taken on new heat as indirect cost rates turned sharply upward. Faculty threatened a sit-in last fall at Stanford University when the school announced that its rate was going to 84 percent from 74 percent.

Because of budget limitations, the National Institutes of Health, the chief dispenser of federal research money, has slashed the number of new grants it awards annually to an expected 4,600 this year from 6,400 in 1987. According to Robert M. Rosenzweig, president of the Washington-based Association of American Universities, the cutback has left scientists, especially young ones, "close to hysterical" about landing grants and thus distinctly disinterested in other uses for the funds they seek.

Finally, there was the matter of the report's tone. While the Institute of Medicine authors emphasized the modesty of their proposals, observers say they also went out of their way to puncture some of the scientific community's most cherished myths, chiefly that the total amount of federal grant money is shrinking. Far from it, concluded the report. The "figures seem to indicate that there are now more U.S. scientists engaged in . . . research with more funds than at any time in the country's history," it said. The recent drop in new grants is just temporary, it said.

But, suggested the report, scientists have refused to face the fact and instead have "misconstrued" the numbers to maintain their myth at least in part to argue for still more money. For researchers who are in the business of facing facts and construing numbers, those were fighting words.

In short order, FASEB, an amalgam of seven scientific societies that represent more than 30,000 scientists, had convened a panel to analyze the IOM report. Its president, Thomas S. Edgington, called a press conference to announce that his group disagreed with almost every aspect.

Edgington, an immunologist at the Research Institute of the Scripps Clinic in La Jolla, Calif., predicted that if the Institute of Medicine had its way, 2,000 scientists and as many as 6,000 graduate and postgraduate students would lose their grants and thus their careers. He hinted that lifesaving research would be stalled, with dire consequences for patients across the country.

And all for nothing, according to Edgington, because the problems that IOM said it is trying to fix by shifting funds to training and maintenance do not exist. "There is no imbalance" between research and training and maintenance, he declared. The claim is nothing more than a thinly veiled attempt to pad university budgets at the expense of actual research, he suggested. "Some of their recommendations represent budgetary gerrymandering" that favor universities, he charged.

Asked how a group as prestigious as the Institute of Medicine -- its 500 members are at the very pinnacle of the nation's scientific establishment -- could be so wrong, Edgington leveled the most stinging barb of all. The group is made up of "very eminent individuals," he said, but not many "working scientists."

That last remark brought an immediate rebuke from Institute of Medicine president Samuel O. Thier. "I think it is a very sad commentary on what (FASEB) perceives as science," he said.

Other Institute of Medicine officials have suggested that a FASEB analysis of their proposal is full of distortions or fabrications.

While the immediate flap may die in coming weeks, observers say, the tensions it exposed will not. The reason is that federal research money, which did grow in the 1980s, is unlikely to do so in the 1990s, confronting the scientific community with decisions it has largely avoided so far: choosing which projects to fund and which ones to drop.

While the report included an obligatory call for more federal money, many say that it is predicated on the notion that American science is in for a period of financial drought and should prepare by mending existing facilities and training enough young scientists to keep the enterprise going.