BLACKSBURG, VA., JUNE 13 -- A somber Gov. Gerald L. Baliles, in commencement exercises at Virginia Tech, today publicly rebuked the overseers of the university for its yearlong athletics scandal and warned other state-supported institutions not to put sports ahead of academics.

In the sternest speech of his 17-month-old administration, Baliles threatened to withhold the reappointment of any member of Tech's ruling Board of Visitors who does not promise to help restore the school's reputation, which has been tarnished by allegations of illegal recruiting, the bitter departure of two athletic directors and a $4 million debt in the university's sports program.

"We have glimpsed an ominous future, a future few of us ever thought possible," said Baliles, the featured speaker at Tech's 115th annual commencement exercises here.

"It is a future of misspent financial resources, of million-dollar coaching contracts and lavish expense accounts," the governor said. "It is a future that invites unethical conduct and humiliating publicity.

"It is a future this institution never dreamt of," he said to applause from the crowd of 27,000. "It is a future that Virginia Tech does not need."

Baliles' address, which galvanized many of the most exuberant graduates into rapt attention -- they interrupted his 15-minute speech five times with applause -- reflected the governor's anger and disappointment over a spate of unfavorable publicity about Tech athletics, according to his aides. Baliles made no apologies for using the most festive occasion of the school year as the forum for a barbed sermon.

Virginia Tech, whose 1987 graduating class of 5,000 includes 1,700 students from Northern Virginia, holds "tremendous potential" for enhancing its already considerable reputation as an engineering center, Baliles said at a news conference after his speech. But, he told reporters, "I don't want that clouded by a lot of bad publicity about athletics."

In his speech, Baliles needled the university's overseers for falling prey to "a new set of ambitions . . . that, if allowed to grow unchecked, could easily compromise Virginia Tech's excellence and injure its dreams.

"These are ambitions not measured by breakthroughs in research, but by breaking records in gate receipts. These are ambitions not measured by the achievements of scholars, but by glory on the playing field. They are not the ambitions of Virginians who care about education and care about Virginia Tech."

Baliles carefully avoided any criticism of Tech President William E. Lavery, who appeared pensive and pained by the harshness of the governor's remarks. Asked during the news conference to assess Lavery's performance during the past year, Baliles demurred, saying: "Leadership is a perception problem, and my perception was directed to the board. Let me hasten to add that Dr. Lavery has been good for this institution."

Lavery later issued a terse statement saying that Baliles' speech was "right on target."

"Graduation is a happy occasion and a celebration of the accomplishments of our faculty, students and parents," the statement said.

"Gov. Baliles' speech brought that out very well."

Others in the university community were more emphatic.

"I told him I admire a man who doesn't pull any punches," said James P. O'Brien Jr., president of the class of 1987, who shared the speakers platform with Baliles on the emerald-green playing field of Lane Stadium.

Kathy Sevebeck, a Blacksburg resident graduating today with a master's degree in adult education, said she thought Baliles' speech was "extremely appropriate today, and here, and before this audience."

"I don't think Tech's been putting education first for the past year -- we'd get things straightened out and in the right direction and then be back in the broil again," said Sevebeck, whose husband and son also attended Tech.

"The governor has a lot of courage to say what he said, because things have been dragging out," Sevebeck said.

"And what more appropriate place than a commencement, a new beginning . . . . "

Baliles noted in his speech that because of the way the state college system is structured, Virginia governors have virtually no direct control over the management of the 15 state-supported institutions.

However, governors do appoint members of the schools' boards of visitors, a prerogative that Baliles indicated he will exercise with great care in the future.

The terms of at least two members of Tech's 13-member board expire soon, but Baliles said he has made no decision whether to reappoint those individuals.

"Something has happened here, something that could jeopardize this institution's long-held mission," Baliles told the crowd.

"This governor holds the boards accountable," he said.

"I expect problems to be solved, not prolonged. And I expect extracurricular activities to have a place -- and be kept in their place."