A new Virginia libel act that would make it a crime to circulate "materially false" literature during a political campaign is shaping up as the first significant veto controversy of Democratic Gov. Charles Robb's administration.

The act, which won approval early Sunday morning amid the confusion of the General Assembly's final hours, was sponsored by Prince William Democratic Del. Floyd Bagley, who says he is still fuming over a handbill printed by his campaign opponents last fall that, he charges, contained a "pack of lies" about his voting record in the state legislature.

But critics ranging from the American Civil Liberties Union to the Reporters Committee for the Freedom of the Press have denounced the act as an unconstitutional attack on the First Amendment, the likes of which Virginia hasn't seen since Thomas Jefferson repealed the Alien and Sedition Acts.

"It's just ridiculous," says Sen. Joe Gartlan (D-Fairfax), who vainly tried to defeat the provision during the session's frenzied final night. "This is going to open up a situation where candidates are going to be fighting out campaigns in the office of Commonwealth's attorneys and the courts."

Gartlan envisions campaigns where candidates would go running to "politically sympathetic" judges, who would then issue warrants for the arrest of their opponents.

"I think that Jefferson would be turning over in his grave if he knew what the Virginia legislature is doing," says Jack Landau, director of the Reporters Committee.

The committee is one of several groups that say they plan to ask Robb to veto the bill. A spokesman for Robb said yesterday that because the criminal libel provision was attached to a much broader bill proposing numerous changes in state elections laws, it was "highly unlikely" that the entire measure would be vetoed. However, the governor could propose an amendment to the legislature when it reconvenes April 21 to strike the Bagley provision, he said.

The Bagley provision would make it a crime for a person to "intentionally cause the circulation of any writing" about a political candidate that the person knows to be "materially false." A violation would be a misdemeanor punishable by up to a year in jail and a $1,000 fine.

The 60-year-old Bagley, an announced U.S. Senate candidate, says he got the idea for the bill after he attended a campaign Halloween party last year where he was shown a copy of a Republican "green sheet" that accused him and his running-mate, Democratic Del. David Brickley, of voting for an unpopular auto emissions bill that he says they never voted for. The sheet also attacked Bagley for, among other things, lobbying in the legislature to win himself a judgeship.

"I'd been through 11 campaigns and I'd never seen anything like it," says Bagley.

When Bagley introduced his measure, it instantly struck a chord with many legislators who say they too have been wronged by campaign opponents. For example, Sen. Adelard L. Brault (D-Fairfax), who voted for the bill, says he is still angry over the time an opponent stuffed leaflets under the windshields of cars in church parking lots accusing Brault of voting for legalized abortion when he has consistently voted against it.

The passage of the Bagley amendment also illustrates how controversial bills can sometimes slip through the legislature on its final night, when pandemonium and confusion reign. Last week, an even tougher version of the bill--which made newspapers and the broadcast media subject to the same criminal penalties--had overwhelmingly passed the House.

But after a Senate committee buried that measure, Bagley attached another version, exempting the news media, to the broader elections bill. Gartlan and Sen. William A. Truban (R-Shenandoah) tried to kill the provision in hectic hallway conference committee meetings on the final night.

Partly for fear the whole elections bill would go down as a consequence, Bagley won out. With no debate, the provision cleared both chambers after 2 a.m. Sunday, when most members were evaluating a $263 million gasoline and highway user tax bill that had yet to be voted on. photo: Gov. Charles Robb faces his first veto controversy.