The Virginia attorney general's office, trying to clarify opinions on the state's conflict-of-interest law, said today that simply having an interest in a business does not prohibit a legislator from voting on issues affecting that field.

Francis C. Lee, counsel to the attorney general, told the Senate Rules Committee this afternoon that a legislator must earn more than $10,000 a year or have a 3 percent financial interest in a business before conflict-of-interest standards apply.

On Monday, Lee told a House committee that a legislator with any connection to a business or profession would have to abstain from voting on related issues. Today, Lee said that was not what he meant.

In the meantime, his earlier remarks prompted a record number of legislators to abstain from voting on dozens of bills and caused House Speaker A.L. Philpott (D-Martinsville) to say lawmakers would be unable even to enact the budget and might as well go home.

Lee told the senators today that "simply because you own something in a corporation" doesn't mean you have a conflict.

He said that Attorney General Mary Sue Terry, who reviewed his testimony with him after Monday's appearance, will issue a further clarification Friday.

"There's a feeling over there in the attorney general's office that Lee's interpretation Monday was unduly strict and that we ought to back off," said Sen. Clive L. DuVal II, a member of the Rules Committee.

But Lee, considered the state's expert on conflict-of-interest laws, said that he repudiates the original interpretations of his remarks, adding, "I never said that."

Lee said the confusion stems from interpretatons of a 1984 state Supreme Court ruling that said a school principal who is also a member of a city council could not vote on school board appointments.

Before that opinion, it was believed that, for example, a banker could vote on banking bills so long as they affected all banks equally. But Lee said today the ruling means that bankers with more than $10,000 from banking income can't vote on such bills if they affect the general public differently than they do bankers.

There were signs today that the attorney general's office also had not resolved how it would deal with the issue. Lee appeared much more reluctant to answer legislator's questions today than during his presentation Monday and asked that many questions be put in writing to Terry.

Lee brought along copies of a detailed memorandum explaining his earlier testimony, but Terry's officials declined to release it to either the committee or the news media. "It's a draft," an official said, holding the copies.

Lee told the senators that the dispute centers on the law's definitions of "personal interest" and when a legislator's personal interest is different from that of the "public in general."

The state Supreme Court ruled that the phrase "public in general" referred to the public at large, Lee said in an interview, even though the legislature intended the phrase to mean "a segment of the public," such as all doctors, or teachers or funeral directors.

A bill pending in the House is intended to clarify that section of the law and the Senate Rules Committee decided today that a Senate panel should draft its own version.

Several lawmakers have urged the assembly to adopt a stricter disclosure law as one way of dealing with the conflict issue, long a sore point for the legislators, who serve part time.

"The result of the court ruling . . . is certainly not one the General Assembly intended," Terry said in an interview earlier. Terry, a former legislator from Patrick County, declined to suggest ways the law should be changed to nullify the high court's stricter interpretation.

"You have to be careful, because later on you may have to interpret the law," Terry said. She also said she did not want to appear "presumptuous" or be seen as interfering in any action taken by the General Assembly.

The uproar over conflicts surfaced Monday when Lee warned that the state Supreme Court's interpretation of the law strictly forbids legislators from voting on any issue in which they have a personal financial interest.

Lee told the House Privileges and Elections Committee the Supreme Court decision means that legislators who own even one share of stock in a bank should abstain from voting on banking matters.

The perennial controversy surrounding conflicts has been heightened this year by the criminal prosecution of the Senate's fourth-highest-ranking member, Peter K. Babalas (D-Norfolk), on conflict charges. The charges against Babalas involve his vote last year to kill a bill that would have placed tougher restrictions on second-mortgage companies, including one that paid him $61,000 in legal fees.

The state's conflict of interest law, passed in 1970, exempted the legislature until 1983. Until then, it was up to each chamber of the assembly to draft rules of behavior.