Alexandria Police Capt. Norman E. Grimm resigned yesterday, acknowledging that he had suppressed a 1975 police polygraph report implicating former commonwealth's alleged sexual bribe.

Grimm's letter of resignation was the first public admission by city officials that police covered up the polygraph report. Sources have said that the 1975 police report included Cowhig's admission of sexual activity with the wife of a man his office was prosecuting on drug charges.

The defendant's wife, Sherry Chenault, 23, has accused Cowhig of soliciting oral sodomy in exchange for a promise of a two-year prison sentence for her husband.

In recent interviews Cowhig, who resigned last month, has denied the charge, saying that Chenault "tried to set me up."

Grimm, a 26-year veteran of the police force, said in a letter released yesterday by city officials that he failed to forward the report to the city chief of police. But he denied "any collusion between myself and Mr. Cowhig regarding the destruction or suppression of that report.

The report contains statements Cowhig made in an interview to examiner Robert Osborne before the prosecutor took a voluntary polygraph test. Although Cowhig told authorities that he had "passed" the test and was innocent of the charge, sources have said he admitted to Osborne that sexual activity had occured.

Grimm, 48, head of the patrol division and former head of the criminal investigation division, was suspended with pay on March 1 pending the outcome of an internal investigation into the handing of the police report. That investigation, Grimm said in a letter of resignation, "determined that I did not handle (the report) in a proper fashiuon."

At the time of Grimm's suspension, Deputy Chief Arlen Justice said the allegations against Grimm were the most serious charges of misconduct ever made against a top level police official on the city force.

Grimm's resignation comes four weeks after Arlington attorney Claude M. Hilton was appointed as special prosecutor to investigate the allegations against Cowhig and the police coverup.

Cowhig resigned as Commonwealth's attorney after being acwuitted of bingo-related bribery and illegal gambling charges. Special prosecutor Edward J. White agreed to drop a third felony charge in exchange for Cowhig's resignation.

Grimm's letter of resignation was released late yesterday by City Manager Douglas Harman, who said in a memo to city officials that an internal police department investigation into the handling of the Cowhig complaint was concluded.

Although sources had said earlier that three officers -- Grimm, Osborne, and former chief John R. Holihan -- were under scrutiny in the internal probe, Grimm's letter of resignation said he acted alone and that he did not forward the Cowhig report to Holihan. Holihan had denied any involvement in a cover-up. Osborne, Grimm's subordinate, is still on the force.

The issue of the Cowhig polygraph report did not become public until two days vefore Cowhig announced he would resign. His successor, John E. Kloch, then requested appointment of a special prosecutor to investigate allegations of "prosecutoral misconduct" against Cowing.

Police Chief Charles T. Strobel said then the he had first learned of the Cowhig report in midsummer when police were conducting a secret investigation of Cowhig's ties to bingo games in the city.