The Environmental Protection Agency has fined a Culpeper, Va., company $25,000 for its role in a 200,000-gallon toxic chemical spill last month that polluted local streams and raised safety concerns about milk distributed in Washington's Virginia suburbs.

The EPA also ordered the firm, Culpeper Wood Preservers, to stop storing the toxic chromium-arsenic solution until the company has filed a new application with the agency describing how it intends to handle the chemicals.

In a separate development, staff members of the Virginia State Water Control Board said yesterday they will recommend legal action against the company that could result in several thousand dollars in additional fines.

The late-January spill, which officials said was revealed by an anonymous tipster, led Fredericksburg officials briefly to cut off the city's water supply from the Rappahannock River, which is fed by the small tributaries. Several Culpeper area dairy farms were quarantined pending tests for toxic chemical traces in milk after livestock deaths were reported.

The incident also angered local residents and Culpeper County officials who complained that federal and Virginia agencies were slow to react and left them uninformed about the spill.

An EPA spokesman said yesterday the penalty, imposed on Monday, resulted from the company's failure to mention the plant's chemical holding pond in an application submitted last year to comply with federal toxic waste regulations.

State inspectors who visited the site last month said a backhoe had been used to dig through the earthen lip around the pond and that trenches had been dug from the pond to the mouth of a tiny tributary.

If the spill is shown to have been willful, criminal charges could be brought against the company, a state water control official said.

The company allegedly committed three separate violations of state water laws, Thomas M. Schwarberg, director of the board's Northern Virginia regional office, said yesterday. He said the plant's owners could be fined $10,000 for each day the alleged infractions occurred.

Schwarberg said the board's staff has recommended the agency seek civil penalties against Culpeper Wood Preservers for allegedly allowing the chemicals to enter the streams, failing to notify authorities when the spill occurred and for storing the chemicals without a permit.

Officials learned of the spill, the result of a breach in the pond's retaining wall, only on Feb. 3 through an anonymous phone call to the water board. The time lapse left state health authorities and area milk distributors unsure whether contaminated milk had been sold to consumers in the Washington area.

Tests performed for the Maryland-Virginia Milk Producers showed signs of chromium and arsenic in the milk, the industry group said. State evaluations revealed safe levels of copper, prompting dairy authorities to declare the milk safe.

County officials, angered at the state's delay in telling them of the spill, recently received a four-page letter of apology from the water board's executive director, R. V. Davis, in Richmond. In it Davis explained that the state agency had not informed local authorities immediately because, "We did not believe the incident to be a public health or water supply problem."

"It's a very nice letter," said Culpeper County administrator Franklin A. Bell Jr. yesterday. "We felt we could have been of some service to the [water] board in handling telephone calls and giving people correct information."