Peter F. Morgan, the Prince George's County police officer fired last June for fatally shooting a fleeing unarmed shoplifting suspect, was reinstated yesterday by a police trial board.

The Christmas Eve 1977 incident-in which Morgan, a white, shot 32-year-old William Ray, a black, as Ray field from the Seat Pleasant police station-became a focal point for racial tensions in the county. Ray, a Washington resident, had been arrested earlier in the day for allegedly shop-lifting two hams from a supermarket.

The board's reversal yesterday of its earlier finding that Morgan used excessive force was apparently the final official action in the controversial case.

Following the shooting, a grand jury investigated the case and found there was insufficient evidence to indict Morgan on a criminal charge. However, this decision was followed by the trial board's original finding that Morgan used excessive force, and Police Chief John W. Rhoads, following its recommendation, fired him.

Morgan appealed his firing to Circuit Court Judge Perry G. Bowen, who ruled that the board erred in finding that Ray's escape was not a violent act and asked it to reconsider the case.

"I'm just delighted with the decision," Morgan said yesterday. "I'm looking forward to going back to work, I've really missed it. It's been a long 15 months."

Morgan's shooting of Ray, combined with a second fatal shooting of an unarmed black suspect by a white officer four weeks later, infuriated many blacks in the county, especially when neither officer was indicted.

Morgan's firing, the two shootings and a contract dispute caused police to stage an eight-day work slowdown last summer. Police voted "no confidence," in Rhoads and the county executive at the time, Winfield M. Kelly Jr., and many of them picketed the county office building with signs reading "Fire Kelly, Hire Morgan."

Morgan said after the trial board finding in May that he was being made a scapegoat by the department. "They had to do something to quiet all the blacks down," he said later. "I was it."

At the trial board hearing, Morgan testified that seconds before Ray escaped, he discovered a syringe in Ray's pocket. He said when he asked Ray what it was for, Ray told him he was a junkie and had stolen the hams in order to get money for a fix.

"A few seconds later," Morgan said in an interview, "I was taking him to a holding cell. I reached back to pick the syringe off the table and then he tossed me. When I got up, he was out the door."

Ray ran out an unlocked door a few feet away across the street and down an alley adjacent to a church. Morgan followed, and yelled three times, "Halt or I'll shoot."

Yesterday's reversal comes four days after another event that exacerbated tensions between the largely white county police force and the increasing number of blacks in the community.

On Saturday, a Circuit Court jury acquitted 16-year-old Terrence Johnson of murder in the June 26 shooting deaths of two county police officers, Albert M. Claggett IV and James Brian Swart.

The jurors found that Johnson, a black youth, was guilty of manslaughter and illegal use of a handgun in connection with the shootings.

Monday, county police officers stayed home en masse to protest the verdict.

Perry A. Smith, one of the leaders of the Coalition to Free Terrence Johnson, saw the timing of the police trial board's reversal in the Morgan case as more than coincidence.

"It raises some serious questions with me," Smith said yesterday. "Is this the way the police are going to strike back at the community because they didn't like the verdict in the Johnson case?

"I think this is a slap in the face to the entire community. It certainly doesn't do anything to cool tempers or bring sanity back to this county. I just hope people will react sanely to this insane decision."

Morgan will receive full back pay. He will have to go through 35 hours of training and pass a marksmanship test before returning to active duty.

Rhoads would not comment yesterday on the decision or where Morgan will be assigned.

"I did what i had to do," Rhoads said, "so did the trial board, and the judge. I imagine the men will be very happy. They've wanted officer Morgan reinstated all along."

Laney Hester, president of the police union, which paid Morgan's lawyer fees of about $6,000, was jubilant over the decision.

"This is the best thing that has happened to us in a long time," he said. "It cost us a lot but it's always worth it when you win." (TABLE) right.Some people didn't think I was right. I guess if I was in the same situation, I might do the same thing. But I don't know. It will be a part of me for the rest of my life though." Morgan will report to the training academy at 8:30 a.m. today to begin retraining (END TABLE)