In the long list of scare stories, this was one of the scariest: the nation's drinking water, even after purification in municipal water plants, contains substances that may be cancer-causing.

It started in November, 1974, when the nonprofit, activist Environmental Defense Fund and then the federal Environmental Protection Agency released reports showing that 66 possible carcinogens (cancer-causing substances) had been found in the New Orleans water supply. The fund suggested the problem was probably nationwide: the EPA ordered a study.

That study, released by then EPA Administrator Russell Train the following April, found that every water system tested - including those in Washington, Fairfax County and Baltimore - contained measurable amounts of possibly carcinogenic chemicals.

There was a Catch-22. Chlorine - the chemical most American systems use to purify water - was found to combine with other sometimes naturally occurring organic substances in the water to form suspected carcinogens. Chlorine itself is not suspect and guards against such once-dread diseases as typhoid and cholera.

The difficulty the EPA had in providing guidance for the nation' 240,000 public drinking water systems was that nobody had established how much of each of the substances found in the water could be ingested by humans before becoming dangerous.

That is the difficulty the EPA still has today. After almost two years of further testing and research, there are still no federal standards that set permissible limits for chlorine compounds and other substances.

In the absence of such Standards, no municipal water works director is going to change the way he is doing business. "When the EPA tells us what the standards are, will do what is necessary to meet them," in the words of Harry Ways, who runs the Washington Aqueduct waterworks for D.C.

"I have no trouble in saying that within the scientific and technical resources available to us we're moving as fast as we can," said Victor Kim, director of water quality programs for the EPA.

Kim reviews his program in a weary, matter-of-fact manner:

The National Academy of Sciences is doing a study on the health effects of chemical substances. The tests are with rats; they take several years persubstance. The EPA is looking for a simple test that would tell the local waterworks that it has a problem with chlorine compound, generally. Equipment that would test and measure each possible chemical is intricate and expensive. New chemicals show up all the time; the measurements are always in minute quantities expressed as part per million or parts per billion.

The EPA does not want to dictate water treatment techniques, just set standards so local officials will know what to meet. The EPA wants local officials to pay for what they do; a high-technology or heavy construction program would produce demands for heavy federal matching funds.

The EPA is looking at Epidemiological studies - statistical studies that show "associations," not "causation," between drinking water and cancer in certain cites. It is all very complicated and uncertain.

The Environmental Defense Fund's Dr. Robert Harris, in a years-long advocacy program, says simply that it is not necessary to do tons of studies to know these things in the water are bad, that the technology of using a carbon filtration system to remove organic compounds from the water is here; that it is cost-effective, and that it should be put in now while the studies continue. The fund is suing the EPA, charging essentially that it is moving too slowly.

Kim said he hopes that some kind of chlorine-compound standard and testing program will be first proposed, then imposed by the EPA "by the summer and fall of 1977."