A Fairfax County whiskey distillery yesterday won approval for plans to begin producing alcohol for auto fuel, but the Board of Supervisors retained the right to shut down the distillery's entire operation if it is shown to be causing a health hazard.

The A. Smith Bowman Distillery has been at the center of a controversy recently, since neighbors of the plant started blaming it for a sooty black mold that grows in profusion around their homes. They believe the mold is a possible health hazard, and quote doctors and biochemists who say it can cause serious respiratory ailments.

The Fairfax supervisors gave their unanimous approval to a Bowman plan for producing up to one million gallons of ethyl alcohol a year. That alcohol would then be mixed with gasoline to produce gasohol, thus stretching the area's gasoline supplies.

The board also approved a proposal from Supervisor Martha V. Pennino (D-Centreville) calling for an extensive health department study of the cause and effects of the mysterious black mold. Another Pennino proposal, vowing to stop distillery operations if it is proven that the plant is causing the mold and that the mold is a health hazard, was also approved.

John B. Adams, vice president, of the Reston distillery, said afterward it is no longer certain the firm will go ahead with the ethanol plans. "We still have to determine how much it has cost us to wait around" for a county decision since plans were announced in July, Adams said. A decision on the matter by the company, which produces Virginia Gentlement and Fairfax County bourbons, is due shortly.

Adams said the supervisors made a decision that was "good for the country because we're running out of gasoline." He said Bowman, which has denied it is responsible for its neighbors' mold problems, has nothing to fear from an investigation.

"Circumstantial evidence seems to indicate that the black sooty mold is caused by the present operations" of the distillery, said Pennino, who represents the area surrounding the plan and has led the county in efforts to solve the puzzle of what causes the mold. She withdrew, for lack of board support, an earlier proposal that would have required an investigation before Bowman would have been permitted to manufacture ethanol.