William Cameron Townsend, the octogenarian founder of the Summer Institute of Linguistics (SIL) has categorically denied charges that this staff has acted as American spies.

"My institute has no relation with the CIA," Townsend declared. "If any member cooperated with the CIA he would be dismissed."

Townsend made the statements both in an interview here and in a letter addressed to Mexican President Jose Lopez Portillo, which he presented to the Mexican Embassy in Washington. The letter denied that the institute was an agent of the CIA.

Townsend, who said he was received cordially by the Mexican ambassador here - "He's a great friend" - blamed the troubles of his institute on Communists and on the World Council of Churches.

"The World Council of Churches financed two meetings of anthropologists and they (the anthropologists) recommended that the governemtns get rid of us," he said.

(In WCC-sponsored consultations on missions, held in the Caribbean several years ago, anthropologists were sharply critical of the kinds of missionary activity that destroyed indigenous cultures in the process of convert-making.)

Bud Hancock, director of the institute's government liaison office here, described his organization as a "scientific, educational organization" formed "to provide educational materials of a high moral order" in the language of peoples in remote parts of the earth.

"In no way do we proselytize," Hancock said. "We do believe the Scriptures themselves provide a philosophy of life that motivates people to change their way of life."

Currently the SIL is operating in more than 30 countries on the basis of contracts negotiated with each country.

In addition, the organization operates four graduate level training programs in linguistics, Townsend said, at the Universities of Texas, North Dakota, Washington and Oklahoma. In addition to training SIL staff members for their work with remote peolevel courses are open to the general public.

In the field, Townsend explained, "Our job for each tribe is to analyze their language and their grammar, collect words for a dictionary. Then we translate the New Testament, or parts of it, for them - and oh, what a difference it makes."

Both Townsend and Hancock insist that it is the Scriptures themselves and not the missionaries that effect conversions. According to Townsend, the Indian forsakes "drunkenness, witchcraft and manslaughter because he reads in his own language about the love of God."

SIL currently has some 4,000 staff members deployed around the world, Townsend said. About half that number are linguists; the other half are teachers, printers, mechanics, pilots and other support personnel.

It has a budget of $23 million. "But we're a faith mission, which means that every worker has to raise his own support" from interested congregations in this country, Townsend said.

While disavowing cooperation with CIA as a matter of policy, Townsend acknowledged that "there was a time when the CIA would come to Oklahome (to the summer program at the university) and try to get people to answer questions." CAPTION: Picture, WILLIAM CAMERON TOWNSEND...writes to Mexican president