A $2.1 million plan to develop a District of Columbia summer camp for youths in southernmost St. Mary's County has been bogged down for years in red tape and a dispute among residents there over sewer hookups to a state waste treatment plant. But finally there is the possibility of a solution in the coming year, Maryland officials said.

About a decade ago, the District planned to construct a swimming pool, dormitories, bathhouses, an arts and crafts center and an administration building on 217 acres that it had just bought. City officials said that they were excited about turning the free camp into a first-class, year-round retreat that could possibly make some money for city coffers.

The camp is 80 miles south of Washington in Scotland, a town of 5,000 that sits serenely on a quiet peninsula. Stretched along a bank of the Potomac River near cornfields, pastures and quaint homes, the camp is a short drive from scenic Point Lookout State Park, where the Potomac and Patuxent rivers and the Chesapeake Bay merge.

Today, the plans are still just words and drawings on oversized sheets of paper. A sewage system that the county required to be built before the camp's expansion and upgrading has been held in abeyance for years by bureaucratic red tape and squabbles between county residents over its use. The debate became a heated political issue in Scotland that stymied Maryland officials working on the project.

The officials recently said that they are drafting final plans for three alternative routes for the sewer lines and that one would be constructed within the first six months of next year. D.C. officials said that they hope to begin construction by next July.

The 10-year delay has frustrated District officials, especially those in the Department of Recreation that runs the facility, officially called the Resident Camp. In the meantime, inflation has eroded the funds that the city set aside for the camp project in 1974, so construction plans have been scaled down.

"We can't do nearly as much with the money now," said F. Alexis Roberson, who joined the recreation department in 1980 and now serves as its director. "We'll apply for more federal grant monies to do what we can't do now," she said. "The camp could really be a major retreat. You can go fishing, boating and crabbing there now. You could do year-round camping there once we get heated cabins."

The St. Mary's County health department has refused to approve the necessary building permits until a sewer line is built to connect the District's camp, now served by inefficient septic tanks, to the state-owned waste treatment plant at Point Lookout park.

The Resident Camp and Camp Brown, a nearby youth camp operated by the Metropolitan Police Boys and Girls Clubs, both needed the sewage lines because their septic systems are failing, according to tests done by the county health department. The tests, conducted in 1978, stated that septic tanks were failing because they were being heavily used and the compactness of the soil deterred adequate percolation of the waste materials into the earth. So the waste was liquefying and seeping into the Potomac, causing pollution.

Also in 1978, both camps received a court order to close. On appeal the camps won a compromise, and instead reduced by about half the number of children accommodated each summer. Currently the D.C. camp accommodates 1,000 and the police camp about 200 during the summer, officials said. Meanwhile, county officials warned camp officials that they would have to shut down the camps permanently if a feasible sewage system wasn't built.

An engineering study quickly determined that due to the flatness of the land, a forced sewer system should be used to alleviate the camps' septic problems.

About three years were taken up by long, tedious bureaucratic studying of the sewage problem and making a decision, said St. Mary's County Health Department Director Dr. William Marek.

"It took a number of meetings with high-ranking county and state officials to determine the proper mechanism. Finally the decision was made to use the Point Lookout plant," he said.

A request to use the state-owned facility was made to the State Board of Public Works, headed by Gov. Harry Hughes. Maryland regulations said that only state-owned properties may use a state-owned waste facility. But in 1981, the board made an exception for the camps because of their public service orientation, officials said.

Under this unique arrangement, said Reed McDonagh, chief of the Maryland Environmental Services, an agency of the Department of Natural Resources, 75 percent of the $608,000 waste disposal project is to be funded through a U.S. Environmental Protection Agency grant. If the EPA issues the grant, the two camps will pay the balance of the construction costs. Maryland will own the sewage system and charge the camps user and maintenance fees.

After approval by the State Board of Public Works, the plan to use the Point Lookout waste treatment plant had to be approved by the St. Mary's County Metropolitan Commission, the local board of public works, because county property would be used for the project.

The first public hearings were held by the commission early in 1982, but they were nullified because no official transcripts were recorded, according to George Aud, chairman of the county Board of Commissioners. The metropolitan commission had approved the design plans without much fanfare.

At the second public hearing this past March, though, groups of county residents clashed, resulting in a standoff. About 95 percent of the county uses septic tanks, Aud said. Now that the state was proposing to build a sewer main, waste disposal became a hot issue. Some residents wanted to tie into the system, others vehemently opposed that idea for fear that an advanced sewer system would attract large developers who would change the character of the quiet residential resort area that has several picturesque, private beaches.

"I don't want developers coming in here and building things up. I don't want another Ocean City," said Wallace Scruggs, a retired Pentagon employe who moved to Scotland from Bowie five years ago for a quieter life.

Many residents whose property would possibly be used for installing sewage pipes felt that it would be unfair for the camps to get sewage disposal service while they could not. "If you were having problems with your septic tank and the state was running a sewage line through your property, wouldn't you ask to use it?" said Aud.

"The Board of Commissioners has always been in favor of tying the camps into the sewage system. All we asked the state to do is to hook people on whose property the lines go through," he said.

State environmental services officials, who are responsible for building the sewer system, responded to the furor by conducting a series of studies, McDonagh said.

A special committee appointed by the commission that included several residents could not agree on what to do to resolve their differences. Finally, the commission approved the state's plan to hook up the camps to the park's sewage plant exclusively.

Many county residents have urged elected officials there to continue studying the county's need for a sewage system of its own.

In light of the possibility that the sewage lines from the camps to the state waste disposal plant could be in place within a year, county health official Marek said that a little more patience is all that's needed now.

"I'm enthused by the fact that we are where we are," he said. "It was a major accomplishment for us to get this far."