It began as an effort to strengthen Virginia's ethics law to insure that legislators, state officials and local politicians do not abuse their positions for private gain.

But what emerged today after several weeks of closed-door wrangling in the General Assembly was a measure making the law more stringent for some local officials but far less stringent for others. It would provide virtually no change for state legislators, who have been criticized frequently in recent years for proposing and voting for bills that help them or their clients.

"I think somewhere along the line people have lost sight of what this bill was supposed to accomplish," said Gordon C. Morse, director of Virginia Common Cause, just before a House committee approved the much-amended ethics bill 18 to 2. "The key elements we thought were going to strengthen the law have been diluted."

The ethics bill, now expected to pass the House with little trouble, would establish for the first time a House ethics advisory committee, which many legislators have long resisted. The form that panel will take was considerably amended at the suggestion of Speaker A.L. Philpott, according to legislators who participated in the redrafting. The speaker will name the members of the panel under the changes.

Instead of one ethics panel investigating the General Assembly, as Sen. Adelard L. Brault (D-Fairfax) originally proposed, the House, like the Senate, will have its own panel composed of two judges or former judges, two former delegates and one citizen.

"I just think the speaker probably felt, and members of the committee in talking to him, that the House should have its own," said House Majority Leader Thomas W. Moss Jr. (D-Norfolk). "If one is good, why isn't two better?"

The bill for the first time also forbids mayors and county supervisors from doing business with their own governments. But it gives them a sizable loophole, since any mayor or supervisor acting on the advice of his appointed city or county attorney could not later be prosecuted, even if his action violated the law.

Del. Owen B. Pickett (D-Virginia Beach) proposed that amendment, saying an official should be able to rely on the advice of his lawyer or, for legislators, of the attorney general. "We ought to decide whether we're trying to entrap local people who are trying to do right," Pickett said.

Del. Mary E. Marshall (D-Arlington) objected. "Do we have any other provision in the law that says if you get an opinion from your lawyer, then you're not guilty?" But Pickett's amendment was approved 12 to 7.

Most of the other amendments were worked out in private, weekend meetings and were not voted on individually. Brault, who has hoped to make this ethics bill the key accomplishment of his last year in the Senate, said he would accept all the changes except the Pickett amendment, which he said he would fight in a conference committee between the House and Senate.

"Although there are some changes in there I would prefer not to have, politics is the art of the possible," Brault said. "There are some things in there that do water down the bill . . . But it will considerably improve and strengthen the conflict of interest law."

Brault and others said the bill is still important because it defines conflict of interest more clearly and establishes the House advisory committee. In other ways, however, the bill makes Virginia's law--considered permissive by Common Cause and some legislators--less stringent:

* The bill would remove most restrictions now placed on local officials who want to do business with local governments in other parts of the state, including certain disclosure and competitive bidding requirements;

* Officials found guilty of willful violations of the conflicts of interest act would no longer automatically forfeit office;

* Legislators would only have to disclose interest in a company if they own more than 3 percent of the firm or receive more than $10,000 from it each year, compared to 5 percent and $5,000 currently. They would not have to list specific companies they own, as Brault had proposed, but only the type, such as "utilities" or "retail firm."

And legislators who own a bank, for example, would still be able to vote on legislation affecting banks. Only if a bill affected their bank alone would the law prohibit them from voting.