The state of Virginia yesterday injected itself into a dispute over where to take the District of Columbia's sewage sludge.

Virginia Attorney General J. Marshall Coleman filed suit in rural King George County, 50 miles south of Washington, seeking a court order to halt construction of a planned $11 million composting plant there.

Coleman charged in the lawsuit that Dano Resource Recovery Inc., the Alexandria firm that has contracted to process the District's sludge, has ignored Virginia health and pollution laws and has failed to obtain needed state permits.

He also questioned whether Dano can produce a commercially successful compost product from the sludge and trash that would be processed by the plant, located on a 195-acre estate on the Potomac River. If the product fails, the sludge would be "permanently deposited in... an area of the commonwealth unique for its great beauty and its historical and archeological significance," Coleman's suit said.

Dano officials could not be reached for comment, but District officials said the suit was another frustration in their effort to find a community that would agree to construction of a sludge processing facility. "It's the same everywhere," said Herbert Tucker, the District's director of environmental services. "Everyone knows we have sludge, everyone knows we have trash, but they don't want you to dispose of it near them."

If the project falls through, Dano would lose two contracts with the District worth $32.5 million over five years, plus hundreds of thousands of dollars in investment money. Earlier this month Dano bought the King George land for $495,000.

Should Coleman win the suit, the District would be left with no long-term plans for disposal of its mounting production of sludge and trash.

Last week the District began composting sludge at a temporary new facility at the Blue Plains regional sewage treatment plant in Anacostia. Not only is that site temporary, it is also inadequate to handle the huge additional amounts of sludge the plant is expected to generate by 1980.

Coleman asked in the suit that Dano be fined $45,000 for each day that construction -- presently held up by recent snow -- continues.

District officials said they had been assured by Dano that the company had all the permits it needed to begin construction. But Coleman said state laws require that a facility for solid waste disposal can't even be built, much less operate, without various permits. No date has been set for a hearing on Coleman's suit.