Two Fauquier County prosecutors yesterday refused demands by federal prosecutors that they stop representing current and former Airlie Foundation executives because they also represent a branch of the foundation being probed for alleged contract fraud, assistant Fauquier County prosecutor Roger A. Inger said.

Inger said that if federal prosecutors on Monday convince a judge to disqualify him and county prosecutor Charles B. Foley from acting as private attorneys for the six individuals, they would immediately seek to have the judge's opinion reversed.

The six have appeared before a federal grand jury probing alleged contract fraud within Raven's Hollow Ltd., a branch of the Airlie Foundation, Inger said. He and Foley represent the six persons and Raven's Hollow. Last October Airlie's founder Dr. Murdock Head, was convicted in federal court of conspiracy to bribe two U. S. Congressmen.

"The Constitution permits an individual to chose his own lawyer and permits lawyers to earn a living" Inger said yesterday. "There is no conflict of interest in this case at all."

Under Virginia law, prosecutors in counties that have fewer than 35,000 people are permitted to have private law practices. Fauquier's latest official population figures are slightly below that level. Foley and Inger are law partners.

Inger said he had received a letter Thursday from assistant U. S. Attorney Theodore S. Greenberg demanding that he and Foley withdraw from the case by noon yesterday because of the alleged conflict. If they did not resign, Greenberg wrote, he would ask a judge to disqualify them, Inger said.

Greenberg claimed in his letter that the lawyers were in conflict of interest situation because they were representing a company being specifically probed for alleged illegalities and also representing individuals who might need to defend themselves if the company is ever indicted, Inger said.

Inger denied there was a conflict. Assistant U. S. Attorney Joseph A. Fisher III, who works with Greenberg, declined to comment yesterday.