Virginia's department of purchases and supplies said yesterday it will stop buying furniture made by a New York firm amid reports the firm is under investigation for allegedly paying kickbacks to department employes.

The firm, InterRoyal Corp., a major manufacturer of furniture used in the state's schools, hospitals, and prisons, reportedly is being investigated for paying kickbacks to state purchasing agents out of a Swiss bank account.

Neither Virginia State Police nor the state attorney general would comment on the investigation, which was reported in yesterday's Norfolk Ledger Star.

The newspaper quoted former state purchasing director Lloyd Nunnally as saying that he had received payments in Switzerland from InterRoyal for work done in Europe. Nunnally has been a consultant to InterRoyal since his retirement from the state purchasing department in 1970. Nunnally said the payment occurred after he retired from his state job.

Walter Stein, an attorney for the New York firm, denied yesterday that the company ever paid kickbacks to purchasing agents and said he was unaware that InterRoyal was the subject of an investigation.

The state purchasing department's director, Philip R. Brooks, yesterday ordered an immediate freeze on the purchase of all furniture made by the New York firm until the allegations are resolved, according to Assistant Attorney General Robert Kyle.

"We don't know whether it's true or not, but the allegation is of sufficient seriousness that we're not going to be caught spending state money with InterRoyal until the matter is clarified," said Kyle.

Purchasing manager Roy Scott-one of the highest-ranked officials in the department-was fired last week under terms of the Virginia Personnel Act, which sets standards of conduct for state employes.

A grand jury in Richmond has been hearing evidence on alleged kickbacks and bidding irregularities in the state purchasing department since December.