Virginia Gov. John N. Dalton, citing what state officials called "dramatic decreases" in levels of the toxic pesticide Kepone in the James River, today lifted the state's four-year-old ban on recreational fishing in the river.

Dalton's action, seen here as the first step in a campaign to allow lucrative commercial fishing to resume in the Kepone-contaminated waters, was immediately questioned that too little is known about the health effects of the pesticide to justify lifting any part of the prohibition on fishing.

"This is clearly the first foot in the door (toward lifting the commercial ban)," said Timothy Hayes, director of the state Environmental Defense Fund. "My concern is that it's likely to be done more for political reasons than for health reasons."

Four months ago, a Newport News judge temporarily lifted the commercial fishing ban. Dalton later restored it by executive order after state health officials warned consumers against eating any of the fish from the James. But today those same officials argued that reductions in the river's Kepone level over the last two years have brought most fish acceptably under federal safety limits.

Federal researchers have branded Kepone a possible carcinogen because it has caused liver cancer in laboratory animals, although they say the pesticide's longterm impact on humans is unclear.

"We're not saying that there isn't any danger in eating the fish, but we are saying that we can't define the danger at this time and that recreational fishermen ought to be able to decide for themselves how to proceed," said Robert Stroube, state director of health protection and environmental management.

Stroube added that, in his professional opinion, pregnant women and small women should continue not to eat fish from the James.

Hayes warned, however, that a recreational fisherman's catch could easily end up on the plates of his children or pregnant wife. And one of the state's leading Kepone researchers, Dr. Philip Guzelian of the Medical College of Virginia, said that while "I don't think small amounts will much enhance the risk, I frankly would not encourage anybody who eats a lot of fish to fish these waters. I don't think it's a benign situation -- there is a risk."

State officials said that over the last two years, Kepone levels in most fin-fish species have dropped by at least half. While they are not certain of the cause, officials speculate that reduced rainfall has increased siltation and covered Kepone on the river's bottom with layers of sediment. Crabs, which nest at the bottom, still show higher levels of the pesticide and are still banned for all fishing.

Dalton took action this afternoon after the state Board of Health voted unanimously to recommend easing the ban, provided that signs are placed at docks and marinas warning that eating the Kepone-contaminated fish " may be harmful to health."

The board acted after hearing state Sen. Herbert Bateman, a Newport News Republican and close political ally of Dalton, argue against the ban. Bateman then took news of the board's action personally to Dalton in the governor's office, after which Dalton signed the order lifting the ban.

"I don't see any risk to human health," said Bateman, who predicted the board would liberalize the restrictions on the state's multimillion dollar commercial fishing industry when it meets in November.The industry has been financially devastated by the James River ban, which declared thousands of the region's most fertile fishing areas off limits.

The ban has been in effect by executive orders of Virginia's governors since December 1975, when federal researchers found evidence that fish from the river had dangerous concentrations of the highly toxic Kepone. The pesticide had been secretly and illegally discharged into the river for years by two chemical in Hopewell, a small town southwest of Richmond. A federal research team has predicted that it may take two centuries for the river to completely flush the pesticide from its bottom.