DETROIT, JULY 13 -- Ford Motor Co. said today it has discovered that a valve seal in a replacement kit designed to keep its ambulances from burning can fail and cause a fire.

Ford is recalling 250 1983-87 E-350 ambulances to replace the seal, installed as part of a program to modify ambulances already on the road so they will be less likely to burn, said Ford spokesman Chuck Snearly.

About 16,000 ambulances still await the modification, and new seals will be put in the kits for those vehicles, he said.

Ford learned of the problem when the seal failed on an ambulance in Waldorf, Md. The ambulance, owned by a Waldorf rescue squad, caught fire and exploded June 22 at a hospital in Clinton, said Robert Dewey, a researcher and advocate with the Center for Auto Safety, a Washington consumer group. No injuries were reported in the explosion.

The Maryland ambulance had been modified under a pilot program offered by Ford and ambulance manufacturers that build ambulances on Ford Econoline van or van chassis, in an agreement reached with the State of Virginia in April.

The modification kits are meant to help the ambulances tolerate pressure and heat in the dual fuel tanks.

Ford is settling the claim with the insurance company that replaced the vehicle, he said. It is the only vehicle being replaced by Ford so far, Snearly said. He said Ford is responsible because it modified the vehicle.

Since the first ambulance fire was reported May 25, 1986, in Richmond, more than 300 incidents of overpressurized fuel, including 26 fires and eight burn injuries, have been reported in Ford ambulances, Dewey said.

Ford has held 90 percent of the U.S. ambulance market since 1983. About 22,000 Econoline vans and chassis have been converted into ambulances since then, he said.

"The center's view is that there is a crisis in emergency medical services and that these ambulances present an ongoing danger not only to emergency medical technicians but to the American public, which relies on these vehicles for safe and effective emergency medical service," Dewey said.

So far, no patients have been injured, although in at least two cases patients were in ambulances when the vehicles caught fire.

The City of Cincinnati sued Ford on July 2, seeking $2 million in punitive damages and $176,000 to replace six Ford ambulances, including one that exploded and five that the city has taken out of service.

In addition to pressure from Virginia officials, Ford has been served administrative subpoenas from the attorneys general of Missouri and Florida requesting information on complaints Ford has received about the vehicles.

The most recent fire occurred July 6 in Winston-Salem, N.C. A Forsythe County ambulance caught fire and exploded at a hospital, singing the first three stories of the building, Dewey said.