The District government has proposed an ambitious plan to solve its perennial sludge disposal problem by dumping more than 700 tons of the mud-like refuse every day in the Atlantic Ocean.

The plan, recently submitted to the U.S. Environmental Protection Agency, has buoyed city officials who have watched helplessly as a series of proposals for land disposal sites, ranging from rural Pennsylvania to coastal strips of Haiti and Colombia, have been torpedoed by political opposition.

"It looks good to me," said Bill Johnson, the city's director of environmental services, about the ocean dumping plan. "We hope we can get it approved in 90 days and we'll be able to move within 30 days after that."

Until recently, EPA has adamantly opposed ocean dumping on the grounds that the practice poses a grave threat to aquatic life, and in some instances, human health. But the District's application for a dumping permit, filed last month with EPA, comes at a time when the agency is actively considering relaxing its stand, according to EPA officials.

The review was prompted in part by a recent court case involving New York City in which a federal judge ruled that the agency must weigh ocean dumping against social and economic as well as environmental costs of alternative disposal methods, such as the land burial process known as trenching.

"The court said we have to consider the impacts of all the alternatives to ocean dumping," said Margo Hunt, an EPA spokesman. "If it's found that ocean disposal is the best method, then it would be permissible."

The city's proposal calls for shipping by barge its portion of the sludge generated by the Blue Plains Sewage Treatment Plant--slightly more than 700 tons per day--down the Potomac to Chesapeake Bay. It would then be shipped to Deep Water Dumping Site 106, located in the Atlantic about 85 nautical miles east of Atlantic City, N.J.

EPA officials said that ocean dumping by the District of Columbia would have relatively minor environmental consequences, in part because the city's sewage sludge is among the least toxic of any major municipality due to the lack of heavy industry in the Washington area. But at least one environmental activist, when informed of the city's proposal, criticized the idea and predicted it would never be approved.

"The District government never ceases to amaze me," said Larry Silverman, legislative director of the Clean Water Action Project, a locally based environmental lobbying organization. "They seem to come up with one weak idea after another. It seems like they're grasping at straws."

Silverman said that, because of the city's relatively "high quality" sludge, District officials could lead the nation in finding ways to put its waste products to productive use. "Washington, D.C. is probably the sludge capital of the world," he said. "There's no city better situated to use its sludge than the District, whether it be for soil conditioning, or fertilizer or strip-mine reclamation. But instead they always want to ship it to South America or something."

District officials, however, argue that they have tried to find more productive uses for the city's sludge but have been repeatedly victimized by contractors' failures and domestic and international politics.

Under court order to cease land trenching in the Maryland suburbs, the city signed a $20 million contract in 1979 for sludge composting with Dano Resource Recovery Inc. But the Alexandria-based firm was unable to deliver after Virginia Attorney General Marshall Coleman blocked it from getting permits for its proposed composting site in King George, Va.

More recently, the city has entertained a variety of proposals from a New York-based company for shipping the odorous sludge as fertilizer to the Caribbean, first Haiti, then Antigua and finally Colombia. Each plan, though, was halted when the foreign governments got wind of them.

This year, the District proposed trucking its sludge to a city-owned landfill at Lorton in Fairfax County, but Rep. Stan Parris (R-Va.) held up a District budget bill in the House until the city relented. When the city then signed a $7 million contract with a Beltsville firm for trucking the sludge to a landfill in Bucks County, Pa., a Pennsylvania congressman attached a rider to a city appropriations bill barring the city from doing so.

Now, admittedly frustrated District officials say they have no place else to turn except the Atlantic.

Currently, the site is used as a dumping place for industrial chemicals from du Pont plants in Delaware and New York and an Allied Chemical plant in New Jersey. The city of Camden used to dump its sludge there until last year when it was blocked by EPA.

The only major municipality still dumping sludge in the Atlantic is New York City, which uses a site about 12 miles southeast of New York Harbor.