The D.C. Parole Board announced yesterday it will rescind a year-old policy requiring mandatory revocation of parole for those who test positive for the drug PCP, a highly controversial move that the board chairman said would bring modest relief to the city's crowded prisons.

The board has also decided to send some parole violators to halfway houses instead of prison and to hold hearings before revoking parole in borderline cases, according to Chairwoman Gladys Mack.

Mack said the existing rules were overly restrictive and forced the board to cancel parole for some who had stable family lives and good jobs, but who slipped up on a single occasion.

The board's new rule on PCP users, effective Monday, was praised by the city's Public Defender Service, but sparked immediate criticism from U.S. Attorney Joseph E. diGenova and Sen. Arlen Specter (R-Pa.), who has taken a special interest in the city's prison policies.

"It's an utter disgrace," diGenova said. "It simply ignores the reality of what this drug does . . . . PCP users are violent, they are dangerous, they kill people . . . . It's undefensible."

DiGenova said he had "no doubt" the board's action was primarily designed to open up spaces in the city's crowded prisons. Officials' concern about the crowding was heightened this month after an uprising and fire at Lorton Reformatory left 32 persons injured.

Specter, chairman of the Senate Appropriations subcommittee on the District, said his panel would "take a close look at what the parole board has done here."

"I believe it's unwise. I don't think they ought to be moving in a more lax direction," Specter said.

Mack said the board's action was not prompted by the prison crowding crisis, although she said the board wants to do "anything we can do that would help in population problems without compromising our responsibility."

Mack said the board decided about a year ago to adopt a strict rule revoking parole for anyone who fails a single urine test designed to show PCP use, because of a perception that PCP users were more likely than other drug users to commit crimes. The board considers other factors before canceling parole for individuals who test positive for cocaine and heroin use.

However, Mack said statistics gathered by the board did not seem to buttress the argument "that this action would be a real serious deterrent to crime." The board sent 146 parolees who violated the PCP rule back to prison in the last nine months, yet the number of parole revocations because of arrests or convictions for new crimes remained about the same as before, Mack said.

"If you saw a big drop, you'd say, 'Aha, the rule is working' . . . but we didn't," she said.

DiGenova dismissed Mack's explanation as "utterly incomprehensible."

"They have no idea how many crimes these people are committing. It's the kind of overanalyzing that goes on when people are trying to justify something that is plainly unwise and silly," he said.

The board's decision also was based on the opening of a new 20-bed drug detoxification unit on the grounds of D.C. General Hospital, which can be used partly for parolees found using PCP, according to Mack.

If that unit is full, Mack said, parolees who fail their urine tests may be assigned to outpatient treatment, although the city's outpatient clinics already have long waiting lists.

Mack said that board officials had not yet determined the number of parole violators who could be sent to halfway houses instead of prison. The city's halfway houses already are flooded with inmates and operate at 20 to 50 percent above capacity.

City Administrator Thomas M. Downs said, however, that the overcrowding at the halfway houses should improve because the city will soon open 120 more beds and plans further expansions this fall.

Mack said the board's decision to hold hearings in borderline cases will help ensure that only those parolees who need to be in prison return there.

Mack said the members of the board, which was criticized by Specter and others several years ago for overly lax parole standards, felt that they had given up too much discretion in deciding when to revoke parole.

"You need to look at the individual case," she said. "We needed a variety of remedies because we run into a variety of situations. What we're concerned about is one's total adjustment to the community."

Cheryl Long, director of the Public Defender Service, said in a statement that she was "pleased" that the board was changing its "draconian policy" on parolees who test positive for PCP use.

The rule "has not worked to the benefit of the community insofar as it results in the arbitrary incarceration of people who are not a tangible danger to others," Long said