An influential Virginia legislative commission said today that the state Department of Education has overestimated the costs of meeting the state's mandated school standards by more than $227 million in the next two years, touching off what could be a heated battle over education funding next month.

The long-awaited report by the Joint Legislative and Audit Review Commission was immediately attacked by the state's largest teacher organization.

"Are we going to fund standards of mediocrity or standards of quality?" asked Ralph Shotwell, chief researcher for the Virginia Education Association, which said it was shocked by the report.

The education department said this year that an increase of $517 million during the next two years would be needed to fully fund programs already required by the state. Both Gov. Charles S. Robb and Gov.-elect Gerald L. Baliles have endorsed full funding of the state standards, but the state Department of Education cut the estimated cost to $409 million last week.

State School Superintendent S. John Davis declined to comment on the legislative report, which said his department had overestimated inflation and had calculated the costs of local school programs not required by state law into its estimates. The report also said the high costs of a few unnamed school systems had the effect of raising estimated costs for all of the state's 135 local systems.

The state spends about $1.66 billion a year on education, or about 65 percent of total public school costs in Virginia.

The dispute centers on the state's official guidelines, or Standards of Quality, that local school systems must follow. Local governments contend the state has required additional programs and instruction standards while never fully funding the state's share of the costs.

The education association said the sharply lower figure could endanger proposed 10 percent salary increases for teachers in each of the next two years, a move that would make the state fall short of setting average salaries near the national median.

A spokesman for Robb, who has supported sharply higher spending on education and is to make his two-year budget recommendations to the legislature in January, attempted to play down the issue.

"Don't take any of these numbers seriously," said George M. Stoddart. He said Robb's budget steering group "will come up with its own numbers. There are lots of numbers coming out."

The Standards of Quality became an issue in the recent governor's race when Republican nominee Wyatt B. Durrette initially refused to endorse spending an additional $500 million on the standards. Baliles, who takes office Jan. 11, declined comment on today's report.

State government officials said the sharply lower figure from the legislative commission would ease pressure on both Baliles and Robb, who had pledged to fully fund the state's share of education costs. Earlier this year, Robb instructed other government agencies to look for nearly $200 million in budget cuts to help meet the costs of education spending.