For nearly three years, the PBB affair in Michigan was perceived as a frightening human tragedy for a small number of up-state dairy farmers.

Their cows were diseased and dying of the toxic chemical that got mixed up in cattle feed. Some families went broke and many became ill, apparently from drinking the milk and eating beef produced on their own farms.

Now PBB has erupted into a state-wide political issue threatening the careers of several state leaders and, some say, even the survival of one of the state's most popular governors> Republican William G. Miliken.

"We are all vulnerable now," said State Rep. Francis Spaniola, a Democrat pushing for reform legislation.

Another Democratic leader calls it "one of those time bombs, only you don't know yet how it's ticking."

It appears to be ticking very loudly. This week a campaign begins to recall Milliken for allegedly mishanding the PBB danger after it became public knowledge in 1974. A convertion of Democrats and the powerful United Auto Workers have denounced Milliken for failing to protect the public from PBB.

Once an issue only to the dairy farmers, PBB fears have spread down-state to consumers in Detroit and other cities. Grocers are flooded with calls asking whether their meat and milk come from Michigan farms. Canada has stopped buying Michigan beef. A federal grand jury and a congressional committee are investigating. There is daily coverage in major newspapers and the scare publicity will increase when PBB gets into the courts for the first time in a million-dollar damage trial in Cadilac.

PBB, or polybrominated biphenyls, is a toxic chemical manufactured by a Michigan company as a fire-retardant. In 1973, some of it got mixed accidentally with livestock feed distributed by the Michigan Farm Bureau. Cattle and poultry began dying and move than 500 farms were quarantined.

The Michigan Health Department, in 1974, tested some families most directly exposed to PBB but concluded there was no significant health hazard to humans.

That verdict was cast in doubt last month by a study performed by New York's Mt. Sinai Medical Center whose report touched off the current uproar. Dr. Irving J. Silikoff and his aides examined 1,000 people who thought they had been exposed to PBB. They found one-third of those examined had adverse health effects possibly caused by PBB. Among them were nervous disorders, headaches, muscular weaknesses and frequent memory losses. More than one-fourth had painful swollen joints and one-fifth had heavy skin rashes.

Although PBB has not been pin-pointed as the direct cause of the maladies, the report has damaged the credibility of two state departments, Health and Agriculture, which are accused of indifference. Protest groups around the state and several prominent Democrats blame Gov. Milliken for not forcing proper investigations. Their protests were underscored by reports last week that small quantities of PBB are still found in the food supply.

"They are all a bunch of cheap politicians," declared Lewis Trombley, a Hersey farmer whose herd was wiped out. "The Department of Agriculture was up here encouraging us to sell our sick and dying cows for food. They told me I could sell mine even though my own kids were getting sick." Trombley said he buried 196 dairy cows that either died or were put to death.

Hilda Green of Chase heads the petition drive for a recall election of Milliken. She said the petitions, requiring about 600,000 names, will go on the streets this week and that organizations throughout Michigan have offered to help circulate them.

The Greed family shot 134 claves and 18 cows believed afflicted by the chemical, and now subsists on food stamps. She suffers from persistent abdominal pains and a rash has broken out on her husband's legs. She says the state Health Department claims to have lost records of medical tests on them and blames Milliken and the Legislature for denying her faimily and others financial aid.

"When you can get disaster aid for a snowstorm, why can't you get something when it is man-made?" she asks.

State Rep. Spaniola, House Speaker Bobby D.Crim and other Democrats are pushing legislation that would drastically lower the lever of PBB permitted in food products sold in Michigan and would indemnify farmers for their losses.

Several Democrats interviewed last week said that if the issue continues to ballon it will be central in their campaign against Milliken next year. Crim is one of several possible candidates, and he is likely to emerge from this legislative session as a champion of PBB reform against a slow-moving governor.

Crim maintains that the governor should have forced department heads months ago to begin thorough testing of the victims and to set lower levels of PBB tolerance in the food supply.

Democratic leaders doubt that the citizens' recall campaign will get off the ground but expect it to create adverse publicity for Milliken and give them a cutting issue for the campaign.

Milliken has responded by championing the Democrats' legislation and by forcing the Agriculture Department to endorse it, however reluctantly.

However, he has not persuaded the Michigan Farm Bureau, a powerful force in Republican politics here. Despite the governor's admonitions, the Farm Bureau - which may be legally liable for damages because if distributed the PBB-laden feed - has mounted an intensive lobbying effort to defeat the PBB legislation.