A Northern Virginia ethics panel has found both State Sen. Charles L. Waddell and his challenger, Del. Raymond E. Vickery Jr., guilty of unfair campaigning in their bitter Democratic primary contest.

The Fairfax County Fair Campaign Practices Commission held late Saturday night that the candidates violated the commission's fair campaign practices code by using distorted, unsubstantiated or erroneous campaign literature.

The panel cited Waddell for three violations and Vickery for one. The incumbent senator was the first to file formal charges last week against his challenger, and Vickery immediately lodged countercharges.

In ruling against Vickery, the four-member commission found that one of the delegate's flyers "distorts and misrepresents Sen. Waddell's legislative record" on seeking curbs against utility rates by the Virginia Electric and Power Co.

Waddell had complained that a Vickery flyer took unfair credit for sponsoring measures to control utility costs and implied that he, Waddell, had taken no action to help consumers.

In a statement released yesterday, Waddell said the Vickery flyer was intended "to keep my true record from the voters." What "is yet to be determined is whether Mr. Vickery is man enough to retract it," Waddell said.

"Absolutely not," Vickery retorted yesterday, saying he would stand by the Vepco flyer despite the commission's ruling. He argued that Waddell's cosponsorship of several utility bills was insufficient effort on behalf of consumers.

Waddell, the commission ruled, violated its campaign code by making statements containing "half-truths" about Vickery's profession as a lawyer and by distorting Vickery's campaign contributions by saying Vickery's family was "the major source" of his funds.

The commission also found Waddell had unfairly "implied character defamation" of Vickery by publishing an advertisement that complained of an alleged telephone "smear" campaign by Vickery that was "shades of Richard Nixon."

Waddell said yesterday that "any excesses on our part have been inadvertent." He accused Vickery of filing the unfair campaign charges against him so he could have "a chit to be traded away for our withdrawing our more substantial allegations."

Vickery said that Waddell's disclosure of his charges to the press and to the Fairfax Democratic Committee violated the commission's own procedures. He called the rulings against Waddell "correct" and said they should discourage future candidates from "attacks on the profession, family and character" of an opponent.

Both men are seeking to represent Loudoun and western Fairfax counties in Tuesday's Democratic primary.