Residents of this small Southern Maryland farming community are up in arms over an agreement that allows two summer camps operated for District of Columbia children to hook up to an underused sewage treatment plant here while denying the same option to them.

A $498,000 federal grant awarded Sept. 28 by the Environmental Protection Agency will pay for 75 percent of the cost of constructing sewer lines from the camps to the 10-year-old plant. The two tax-exempt camps will pay 25 percent of the cost as well as part of the plant's operating and maintenance costs, state officials said.

Under Maryland regulation, only state-owned facilities are allowed to use state-operated sewage plants, but an exception was granted to the two camps because of their service orientation, a state official said.

The sewage treatment plant in summer now serves facilities used by upwards of 1,400 campers a day at the Point Lookout State Park, as well as beach buildings and boat marinas.

But even at the height of the tourist season, the plant processes only 25,000 gallons a day, a 10th of its 250,000-gallon capacity, state officials said. The camps will send an additional 30,000 gallons a day, they said. It is the plant's excess sewage capacity that some residents would like to tap.

George Keller, project manager with the office of environmental programs in the state health department, said the 14-square-mile area's 1,022 houses could be accommodated without taxing the plant.

The state board of public works has granted an exemption to the camps to hook up to the plant, but has given a final turn-down to the residents, saying it is the county's responsibility to provide sewer service. County officials say they cannot adequately document the need, but are exploring with residents individual alternatives to sewage disposal.

Final plans for the sewer lines to the camps were approved by the state and county commissioners in August, and residents contend that they are now virtually shut off from any future service.

A study made in 1982 by the state indicated that the septic systems used by nearly all the houses here pose no significant health problems, a finding the residents contest.

"The idea that federal money is being used to grant sewage privileges to outside interests without changing our status quo is appalling," said Richard Metz, an employe at the Patuxent Naval Air Station and a resident of Scotland, Md.

"It's taxation without representation," said Bud Ridgell, of Scotland Beach, Md. Along with about 100 other homeowners on this scenic peninsula, Ridgell reports that his septic tank overflows and run-off becomes contaminated when the rains are heavy.

Like much of southern Charles and Calvert counties, this southernmost tip of St. Mary's County, where waters of the Potomac and Patuxent rivers swirl into Chesapeake Bay, has been under a building moratorium for 13 years because of the sewage disposal problem.

In the meantime, state and local officials have tried to determine how best to dispose of sewage the clay here can no longer hold. County officials have concluded that the county can't afford to build a separate system to serve the scattered homes of the peninsula.

The sewage treatment plant here was the centerpiece of a highly touted plan drawn up in the mid-1960s by the administration of former governor J. Millard Tawes to buy and develop Point Lookout State Park to overcome the region's deep-seated economic woes.

The peninsula was to become a showcase playground, with supporting marinas for tourist and fishing trades. A regional highway, oyster bed development and projects to control water pollution and sea nettles were also pushed as ways to create jobs and attract tourists and industry. But today, only the park and the marina are in place; the highway is nearly completed.

Meanwhile, in 1978, St. Mary's health officials ordered the District camps to close because waste from their septic tanks was polluting the Potomac and Chesapeake.

Rather than shut down, the camps, one operated by the Metropolitan Police Boys and Girls Club and the other run by the District's Recreation Department, drastically scaled down summer programs.

The number of campers was reduced by half to about 1,200; showers and washing laundry were restricted or banned and disposable plates used to cut down on dish-washing.

Now, with federal money paving the way for the camps to hook up to the plant, about 270 residents of Scotland and Rodo beaches and another 800 in the nearby towns of Scotland and Ridge, Md., have redrawn battle lines in the increasingly political sewage war.

Despite their interest in hooking up to the system, some remain staunchly opposed to growth or anything else that might change the rural quality of life of their area.

"I don't want another Ocean City down here," said Wally Scruggs, a retired federal government worker who moved to Rodo Beach six years ago. "I just want to maintain the tranquility without big-city hubbub and the crime that comes with it."

Others argue that health and ecological concerns far outweigh negative effects of any development that may result if sewer connections are allowed. "If there's effluent washing from houses, down gulleys and into the bay, it's defeating the whole purpose of the governor's bay clean-up project," Metz said.

"Why should those D.C. camps be allowed to expand with their new sewer hook-ups when we can barely survive as a community?" asked W.B. Peterson, a builder who has lived in Ridge for 25 years.

Betty Ridgell echoes these concerns saying, "Residents here are sitting on extremely valuable recreation land, but living in a Stone Age ghetto as far as hygiene and earning a living go. There's been no growth here for 10 years and jobs have all but dried up," she said.

For its part, the state said the county could never prove that failing septic systems in Scotland and Rodo Beach posed a health hazard or created an overwhelming need for sewage collection, said Keller, the project manager.

"Whereas failures at the D.C. camp were massive," septic surveys of Scotland and Rodo beach homes were inconclusive, Keller said.

But Edward Cox, administrator for St. Mary's five commissioners, said the state survey, a requirement for federal funding, was done in the winter, when rains are lighter and runoff problems not as serious.

Betty Ridgell said many people denied that they had failing septic systems because "they were afraid their property would be condemned. Many people did not put the dye into their systems or just used port-a-johns during the testing period," she said.

Cox also said the county was heavily lobbied by District officials to approve the project.

"We recognized that the camps do serve needy children. It's just too bad they are not our county children," Cox said.