Following reports of widespread cheating on a nationwide qualifying test for nurses, Maryland officials yesterday granted conditional licenses to 1,200 graduate nurses who took the exam in the state last July.

The state Board of Nursing agreed to accept the results on the standardized exam but said it would revoke nurses' licenses or invalidate the entire test if 'widespread improprieties" are discovered. A national nursing board is investigating the allegations of cheating in four major metropolitan areas.

The exam, which virtually all registered nurses are required to pass before being permitted to practice, also was taken by 1,800 recent graduates of nursing programs in Virginia, 500 in the District of Columbia and thousands more across the country.

Officials in Virginia and the District of Columbia said yesterday they are waiting for the National Counil of State Boards of Nursing to complete its investigation before deciding whether to issue licenses.

New York officials recently threw out results of the test taken by 12,000 prospective nurses in that state after finding what one official called "an evident breach of security." There were allegations that answers to the test had been sold in advance for sums ranging from $300 to $2,000 in New York, Philadelphia, Chicago and Detroit.

No other states have reported similar evidence or taken such drastic action.

"The decision (of the Maryland board) is fair to the candidates and protective of the public as well," said Henry G. Nathan of the Maryland Department of Health and Mental Hygiene. "We're saying, 'Okay, you can go ahead and be licensed, but if something comes up in the future, we can revoke the license.'"

The Maryland board's decision was welcomed by many graduate nurses from programs around the state who took the test last July and have since started working in Washington area hospitals.

"It's a relief," one nurse said. "I must have talked to at least a dozen others yesterday, and we were pulling our hair out during the wait."

Graduate nurses take the exam to earn the rank of registered nurse, which is at the top of the nursing staff ladder in a hospital with more duties and responsibilities, as well as higher pay, than other nursing positions.

At Holy Cross Hospital, for instance, registered nurses receive starting salaries of $12,954 a year, about $800 more than graduate nurses. The salaries of registered nurses increase each year, whereas those of graduate nurses do not, officials said.

The New York action could affect some Washington area nurses because the state has said it will not honor its reciprocal agreements that normally permit a person licensed in one state to practice in another.

Nathan said any nurses who passed the test in Maryland but want to work in New York would have to take the exam again.