Safeway will no longer sell apples treated with daminozide, a chemical that is widely used to enhance shelf life despite evidence that it can cause cancer, the food retailer announced yesterday.

The decision by Safeway, the nation's largest food retailing chain, follows recent efforts by consumer advocates to institute a federal ban on daminozide -- commonly known by the brand name Alar.

Safeway's move was seen by those advocates as a major step toward eliminating the chemical from the nation's food supply.

Safeway has advised its suppliers that it will not purchase apples treated with daminozide when the fall apple crop is harvested, a spokeswoman said.

Opponents of the chemical have complained that it has widely been used to extend the shelf life of apples and to enhance their red color, despite findings as early as 1973 that it produces cancer in laboratory animals.

An attorney for Public Citizen, an organization founded by consumer advocate Ralph Nader, estimated that more than 50 percent of some apple varieties sold are treated with the chemical before harvest. Daminozide also is used on some peanut plants.

Public Citizen, along with the National Resources Defense Council and two states, recently petitioned the U.S. Environmental Protection Agency to bar the chemical, first licensed in 1968.

Nader, who had lobbied Safeway to discontinue its purchases of apples treated with daminozide, yesterday issued a statement describing the supermarket chain's action as "the result of informed consumer dissatisfaction with the chemical tainting of a good nutritious food with a chemical risk."