The government's settlement with the all-terrain-vehicle industry has earned some harsh reviews: ''less than half a loaf'' according to one critic; a ''sellout'' according to many others. I share some of this frustration, but as one who voted for the settlement, I think we have acted in the best interest of the American consumer.

Here is the situation we faced: between January 1982 and September 1987 there were 883 ATV-related deaths (377 victims were under 16) and around 271,000 injuries. That's an average of 20 deaths and 7,000 injuries per month on the 2.3 million ATVs currently in use.

Three-wheeled ATVs are especially dangerous; your chance of having an accident on a three-wheeler is 1 1/2 to two times greater than on a four-wheeled model. That is why we sought -- and, thankfully, got -- a halt to sale of the three-wheeled models, which presented a much more urgent problem.

The chief criticism of the settlement is that there is no refund provision to force industry to buy back three-wheeled ATVs from consumers. The complaint is understandable. If these vehicles are dangerous, which is clearly the case, why should consumers be stuck with them? How could the government allow industry to get away with this?

These concerns led critics to insist, vigorously, that we should have held out for the repurchase provision.

Wish lists are one thing, hardheaded negotiations another. Industry made it clear that it would fight the refund provision, which could cost more than $1 billion by most estimates. According to our counsel, a court battle could be expected to last four years. Worse yet, most of our lawyers were far from certain that we would prevail.

Faced with the monthly death and injury toll, those of us at the commission had a decision to make. Do we hold out for what may be an impossible dream, or do we go for immediate relief? Do we fight the odds for four years, during which deaths and injuries might continue at the current rate, and end up with very little? Or do we act now to save lives, reduce injuries and get nearly everything else we wanted?

I opted for immediate action. The commission first undertook an examination of the ATV issue in 1984, and as 1988 fast approached, no meaningful action had been taken. And because the settlement allows us to pursue repurchase or recall if current remedies do not reduce deaths and injuries, I did not feel this was a case of cut and run. The commission will see this issue through.

The agreement itself is timely, effective and comprehensive. The plan calls for an immediate "stop-sale" and removal of three-wheeled models from dealer inventories. In order for these models ever to be sold again, they would have to meet standards that will be forbiddingly tough. Free hands-on training for new purchases and family members, as well as for those who have bought an ATV during the last year, is another provision. Warning labels will be affixed to the vehicles and posted in dealerships. Notification of potential hazards will be mailed to past purchasers of ATVs, and dealers will be actively discouraged from marketing adult-sized models to children under 16.

These measures should reduce deaths and injuries. Inexperienced drivers in their first month of ATV use have 13 times the average risk of injury, a problem addressed by the training provision. As for children operating adult-sized vehicles: their risk of injury is 1 1/2 to two times the average risk. Dealers will not sell inappropriate vehicles to this group, and will warn parents of the inherent danger. A multimedia safety campaign will also drive home the point.

Consumers also need to do their part. Our injury survey shows that 31 percent of ATV drivers carry passengers, a dangerous practice, as reflected in the fact that 20 percent of the injured are passengers. Almost 10 percent of the injuries and over 25 percent of the deaths occurred while ATVs were being operated on paved roads. Alcohol use was seen in 30 percent of the fatal accidents.

I reemphasize that the commission will continue to monitor the ATV issue closely, and is ready to proceed with other remedies should deaths and injuries not decline. Our critics have every right to express their opinion, but considering the real options we had to choose from, I feel the settlement is in the public interest.

Terrence Scanlon

The writer is chairman of the Consumer Product Safety Commission.