When a museum in Hutchinson, Kan., asked a month ago if it could display the burned-out Apollo space-craft in which three astronauts died in 1967, it put the space agency on the horns of a dilemma it had managed to avoid for 11 years.

"We haven't turned down the request," said Mark Fontaine, chief of the supply branch at the National Aeronautics and Space Administration, "but there is a real concern here that the spacecraft involved should not be put on public display."

There's a good reason why the space agency is against displaying the Apollo 1 spacecraft, which never flew because of the electrical fire that raged through it on the launch pad at Cape Canaveral in a routine test.

The spacecraft is still charred inside and out, a grim reminder of the deaths inside of Virgil (Gus) Grissom, Roger Chaffee and Edward White. Outside of airplane crashes, it was the only time American astronaits lost their lives on duty and was an accident that scarred their families and hundreds of others who worked in the Apollo program.

The alternatives to public display that the space agency has under consideration are burying the spacecraft, and the suits the dead astronauts wore; cutting the spacecraft into pieces and selling them for scrap, or crushing it like a junked car and dropping in into the ocean.

At the end of its investigation of the fire NASA ordered the 12,000-pound spacecraft preserved in nitrogen gas and encased for 10 years.

The reason was a hope that some method could be devised to pinpoint what caused the fire. Space sleuths have cited countless things that fanned the flames but no one ever found the cause.

The 10 years have passed and the space agency must decided what to do with the spacecraft. It has stopped paying the $800 a month in care-taker fees to replenish the nitrogen gas that leaks out of its container. The spacecraft and its thousand of parts soon will begin to corrode.

Public display seems to be out, even though the Kansas museum hasn't been told that. The Environmental Protection Agency might have something to say about dumpling the spacecraft at sea because it enforces the law against ocean dumping. At the least, NASA would have to work up an environmental impact statement.

Selling it for scrap is still a possibility, except that the space agency fears that scrap dealers would get wind of what they're buying and then sell momentos of a space tragedy. Burial on land just seems pointless.

There's a good chance NASA Administrator Robert G. Frosch will order another 10 years' entombment in nitrogen, even though that would cost the taxpayers at least $100.000.