Peter Knop thinks he has the answer to the landfill crisis.

The Loudoun County agribusinessman has a grand vision of rounding up branches, stumps and even whole trees cleared by developers, spreading the wood in massive, snakelike rows a few miles west of Dulles International Airport, and making it decay into compost.

The way Knop sees it, he can divert thousands of tons of woody waste from expensive, crowded and unpopular landfills and turn it into "brown gold." By simulating conditions in a rain forest, he hopes to decompose the wood into organic fertilizer on 15 of his 1,200 acres.

There is no evidence that anyone has ever tried the scheme, let alone succeeded, on such a scale. But that doesn't stop Knop. He said he has had good results with pilot projects, and he is constantly seeking ways to improve the process.

He has received encouragement from a variety of sources, such as the U.S. Environmental Protection Agency, Virginia's Center for Innovative Technology, a state senator and such diverse magazines as Virginia Business and Organic Gardening.

Knop has encountered some unexpected resistance too. Landfill operators have fought him, saying his operation is unfair competition, and the Loudoun County government has tried repeatedly to shut it down. More than one year into the struggle, the county has not succeeded, but a crucial court test is scheduled for tomorrow.

Loudoun officials say Knop is running a stump dump in violation of county and state regulations.

Officials say they probably would not oppose Knop if he were composting wood products from his own property, which is called Ticonderoga Farms. However, they say they can't be sure that all of the materials dumped into Knop's operation are environmentally safe, and they say that heavy truck traffic could tear up the county's gravel roads.

"Two hundred dump trucks in one day -- I'm not really sure that's a family farm," said Deputy County Administrator James R. Keene Jr. Moreover, officials fear that other farmers will copy Knop because of the potential profits. "This could turn Loudoun County into a stump dump," Keene said. "People could go out of the cattle and corn business and go into the stump business."

Knop said scores of inspections have failed to turn up any evidence of environmental hazard. He said he is more than willing to submit to any reasonable regulation of his operation, which he argues is something new and not covered by existing solid waste and zoning laws.

"This thing is a vendetta that has cost the county enormous sums of money," Knop said. "These guys are nuts."

His experiment comes at a time when private and municipal landfills are nearing capacity all over the country, environmental rules are increasing landfill costs, homeowners are opposing new dumps and alternatives to burying solid waste are becoming more expensive.

State law will force all Virginia localities to recycle 10 percent of their solid waste by 1991, 15 percent by 1993 and 25 percent by 1995. Yard waste accounts for 18 percent of the material pouring into the nation's landfills, according to the EPA, and Knop said his vision could help local governments exceed state recycling goals.

It also offers significant profit potential. Although Knop does not plan to sell his compost, using it instead to fertilize his own Christmas tree farm, many haulers are happy to pay $130 to $190 to unload their stumps there, rather than taking them to a landfill in Lorton and paying about $300 a load.

Knop has applied for patents for the process. Attempting to simulate conditions that rot wood rapidly, he spreads the materials in piles about 10 feet wide, 10 feet high and hundreds of feet long. The windrows are sprayed with fungi, covered with vines and kept moist to promote decay.

"Whether we can decompose this stuff in six years or nine years -- who cares?" he said.

The project began as an experiment in the early 1980s out of curiosity and the desire to improve his shallow, clay soil. Knop, 51, said he does not need the profits from the composting operation.

Trained as a banker and lawyer, he is relatively well-heeled. And he could sell the farm, where his parents and grandparents also lived, to developers tomorrow for close to $50 million and put his feet up for a few decades. But he and his three children say they are determined to keep it.

An impish, curly haired, enthusiastic entrepreneur who talks and gestures almost nonstop, Knop often speaks in strings of superlatives. Knop envisions his property as a center for agricultural research and woodland recreation.

For the moment, he has something to prove about the need to recycle wastes and devise new technologies, and he plans to battle Loudoun officials and anyone else in the way of his composting operation. "It's a matter of principle now," Knop said.

Last year, Knop sued the county, claiming that his operation is a form of agricultural recycling and therefore exempt from state solid waste disposal rules. He went a step further, seeking a ruling that only the state government, and not Loudoun, can regulate solid waste. The case is pending.

And on Friday, Knop sued the county government for $40 million in federal court in Alexandria, alleging that officials have violated his civil rights in their zeal to shut him down.

Meanwhile, Knop expects to be in court tomorrow to appeal a Loudoun government finding that his operation is improper in agriculturally zoned land. He concedes that an adverse ruling could close his operation.

"The Ticonderoga process is going to be around; it may not be around in Loudoun County," he said. He opened a similar 15-acre composting operation west of Gaithersburg in early June. And that, he said, is just the beginning.

"We'll be in New Jersey, Florida and hopefully plenty of other places in Virginia" in the next year or so, he said.

Last winter, a bill in the Virginia General Assembly would have given Knop a one-year reprieve from permit requirements. It breezed through the House, but a landfill industry lobbyist attacked it in the Senate as unfair competition, and the measure failed.

Knop said he and the EPA are negotiating an agreement where he would get some of the agency's advanced technology. The Center for Innovative Technology is studying a proposal to test application of Knop's process for decomposing paper.