U.S. District Judge John Lewis Smith Jr., told the District government yesterday that it must tell him by next Tuesday the location within the District where it will dispose of the city's output of sewage sludge.

Smith's stern order came at the end of a 1 1/2 hour hearing in which the District government again tried to tell the judge it could not comply with his two similar earlier orders to find such a location within the city borders.

Instead, the District had presented Smith last Tuesday with a report suggesting that its share of the 900 tons' of daily sludge output from the Blue Plains water treatment plant be dumped on District-owned property in Prince George's and Fairfax counties.

Attorneys for both counties said yesterday they found such a plan unacceptable - with a Prince George's lawyer saying the city had "blatantly and arrogantly refused to take any sludge" and a Fairfax County lawyer saying the city's refusal to directly confront the sludge disposal issue was "transparently political."

Judge Smith indicated he agreed with the sentiments of Fairfax and Prince George's County and found that the District government, "regretfully, either misconstrued the orders or is in noncompliance because of its failure so far to find a site within the city's borders.

Assistant D.C. Corporation Counsel John C. Salyer said the report filed with Smith last Tuesday was the best the city could do and came only after Salyer had met personally with D.C. Mayor Walter E. Washington to "make it perfectly clear" that serious sludge disposal problems existed.

"I notice that Mr. Dugas is in court today," Smith said at the close of the hearing, referring to the presence of D.C. city administrator Julian Dugas. "I hope he has sensed the tenor of this meeting."

Yesterday's hearing comes at a time when the area's sludge disposal problems are reaching crisis proportion, attorneys said. All of the area's sludge produced by Blue Plains is currently being dumped at a Prince George's County tract near Cheltenham, but it will be full on Sept. 21.

Smith has ordered each jurisdiction to take care of its own share of the sewage disposal byproduct after that date. Yesterday's hearing centered several times on the fears of various jurisdictions that they not become the "sludge-dumping capital" of the area.

Salyer contended for the District yesterday that there was "no legal reason" the District could not use land it owns in the two other jurisdictions.

However, Prince George's County Attorney James C. Chapin said Salyer's remarks merely show that the District "believes it's under a different standard. It never intended to designate a site inside the District of Columbia." He said the city's report to the court about its failure to find an inside-the-city site "borders on contempt."

Attorneys for various jurisdictions, as well as U.S. Environmental Protection Administration attorney John Varnum, said the city should build a sludge composting site on available land it owns at the Blue Plains plant.

Salyer rejected those suggestions earlier, though, adding, "We're not squeamish about disposing . . . sludge, but we just don't have the space. We've done what we think we should do."