A cold, hard wind was blowing through this mountain town early on the morning of March 22. But at the sprawling Westvaco paper mill along the Jackson River, the predawn's rawness didn't penetrate the 100-foot tall 4-B bleach tower.

The four men and three women working there were cramped but cozy inside a metal cage that was suspended 30 feet off the tower floor. Hot air blowres,much like those used in many construction jobs, were below, warming the workers and keeping the resins they were using to reline the tower pliable.

It was a delicate process. If the tower got too cold, the chemicals would not bond to the tower; if it got too hot, the chemicals the workers were using could burst into flames and explode.

Shortly after the seven-member crew began their 3 a.m. shift,supervisor Willie P. Sanders, 48, Shouted down to the workers mixing the resins:

"God, it's sure hot in here. It must be 98 degrees."

Those were among Sanders' last words. Minutes later the tower was transformed into a 100-foot tall blow-torch. Sanders and his six fellow workers were burned alive in a fire that demolished much of the tower and was visible a mile away.

The accident, the worst industrial tragedy in Virginia in seven years, has renewed controversy over the adequacy of a state-run job safety program and the paper company's role in protecting workers at the plant. Unions have been quarreling for years over the state's program, contending that Virginia has too few safety inspectors and goes about the job of policing job sites timorously.

Here in Covington, almost 300 miles southwest of Washington, job safety was a principal subject of the prolonged and bitter 1978 strike between the United International Paperworkers Union and Westvaco. After workers complained, the state sent inspectors into the plant and came out with a list of 258 health and safety citations, including six "serious" ones that involved defective and exposed electrical equipment. The company paid fines of $10,180.

When the fire a week ago erupted here, federal and state officials sent separate safety inspection teams to the plant. They arrived within hours of each other, and this time the state inspectors yielded to the federal ones without any trace of the acrimony that has marked the safety debate elsewhere.

What the federal Occupational Safety and Health Administration inspectors are seeking is the cause of the fire. Investigators have one tantalizing clue: In the blackened debris at the bottom of the tower, they found the top of a Clear-Vu butane cigarette lighter. "Butane lighters are a no-no in such situations," said one official. l"They don't have a top and can light [accidentally] in your pocket if you brush against sometimes."

As OSHA continues its investigation, Westvaco has resumed round-the-clock operations at the plant where 1,800 workers produce cardboard containers that are used to hold everything from milk to perfume bottles. The bleaching tower, which was used to store water, wood pulp, and chlorine dioxide for papermaking and needed a protective coating of fiberglass to contain the caustic materials, has been bypassed.

Westvaco disclaims responsibility for the accident and notes that the dead workers were employed by International Reinforced Plastics Co. of Denmark, S.C., a Taiwanese-owned firm that had been contracted to reline the tower with fiberglass.

Oblivious to the accident, at 7 a.m. every day, a plant worker continues to update the company's claimed safety record on a large sign near the main gate.

"116,328 manhours without a disabling injury," the sign said this weekend. "Keep it growing!"

As to last Saturday's tragedy -- the worst industrial accident in Virginia since a concrete skelton of an apartment building under construction at Skyline Towers in Fairfax County collapsed in 1973 -- plant spokesman Andy Dreszek says: "The job was not ours. It was being done by an outside contractor with his own employes."

Not everyone sees it that way. Families of two of the victims have filed $15 million lawsuits against Westvaco, alleging the company caused the "wrongful deaths" of seven workers through "negligence and careless and reckless acts."

Under state law, International Reinforced Plastics may be sued by the workers only if there were any violations of federal occupational safety laws in the accident.

"As far as I know, were following procedures," says the company's lawyer, Thomas B. Bryant III. "You'd be surprised how meticulous they [the glassers] are about safety prodecures."

Bryant emphasized aspects of the operation over which his company had no control: the crane which raised and lowered the glassers inside their cage in the tower and the consultant who designed the fiberglass-relining operation. The crane operator was a Westvaco employe and the consultant had been hired by Westvaco, he said.

Lawyers representing the victims' families said Westvaco carpenters installed a plywood platform inside the tower's metal base. According to some investigators, the platform could have obstructed ventilation and passage to an escape hatch.

The consultant, James C. Mathis, who owned International Reinforced Plastics before he sold it, minimized his role in the actual operation, saying he drew up the specifications. But, Bryant claimed, "Jim Mathis dominated the job. He told them [the glassers] everything to do."

However,a source close to the OSHA investigation said, "There is nothing in the specifications to trip him [Mathis] up . . . He does not appear to be a key in the investigation."

According to OSHA investigators, relining a fiberglass tank "is a very hazardous job" because it involves using highly flammable substances in a closed space.

To minimize the danger, elaborate procedures usually are prescribed to avoid creating a spark that could ignite the flammable chemicals or their vapors. There are nonsparking motors and hand tools, explosion-proof lighting and even special equipment to avoid sparks when transfering liquids between containers.

The recovered cigarette lighter is, so far, the most revealing clue. But can the investigation find out if the lighter was the source of ignition? "We'll never know," said one official. "The person who owned it is dead."