The Food and Drug Administration will announce today that it will permit saccharin to be sold as a [WORDS ILLEGIBLE] drug with a proposed label saying it is intended for the use by diabetics and others with a medical need to curb their sugar intake, sources said last night.

The proposed labeling will warn that the artificial sweetener causes bladder cancer in laboratory animals and could increase the risk of cancer in human [WORD ILLEGIBLE].

The agency's proposed ban on saccharin in diet drinks and foods intended for use by the general population is expected to take effect in the summer, propobably in July, as announced by the FDA on March 9.

[WORDS ILLEGIBLE] reported yesterday that the FDA was considering permitting the sale of saccharin as an over-the-counter drug, such as aspirin, and that the new commissioner of the agency, Donald Kennedy, was preparing to sign the necessary official papers.

The action may slow down a campign on Capitol Hill to weaken the Delaney Amendment, a 1958 law that prohibits food additives which have been demonstrated in tests to cause cancer in animals or man. In announcing the ban on saccharin as a food additive last month, acting commissioner Sherwin Gardner invoked the amendment.

Gardner acted on the basis of Canadian government tests in rats. FDA scientists audited the tests and found them to be reliable. The action generated widespread public criticism partly because saccharin, 350 times sweeter than sugar, is the only available synthetic sweetener. Reclassifying it as a drug may temper the criticism.

Rep. L.H. Fountain (D-N.C.), the leading monitor of the FDA in the House, said that the FDA was returning to the saccharin policy it had maintained from 1911 for nearly a half century until cyclamate, a now-banned artificial sweetener, first started to be used massively in soft drinks.

The policy was that the addition of saccharin to normal foods is illegal and makes those foods legally adulterated and subject to regulatory action. The policy also provided that persons in medical need of the chemical could buy it as a non-prescription drug.

Reached in North Carolina, Fountain said that if the FDA had restored its old policy after the Canadian test results became available, "the intense public reaction that resulted probably would have been avoided."

Fountain, chairman of the House Intergovernmental Relations and Human Resources Subcommittee, said that the way the agency announced the proposed ban in March "was not conducive to acceptance or calm evaluation by the public. I hope the furor that FDA provided will now subside and permit the calm consideration of the need, if any, for changing the Delaney clause."

Meanwhile, an attack on the FDA for maintaining its plan to ban saccharin from foods and beverages was being prepared by the Calorie Control Council an Atlanta-based group supported by beverage and food suppliers that use saccharin. The council was planning to present scientists critical of the ban at an informal press conference after the FDA holds a session with reporters this morning.

The agency is to announce that it intends to ban saccharin not only from foods and beverages but also from products that are legally cosmetic and that can be ingested, including toothpastes, mouthwashes and lipsticks, and from medicine in which the purpose of the sweetener is the non-medical one of improving taste.

Comments on the proposal will be accepted for 60 days. Final regulations are expected to be published this summer, and will include the schedule of effective dates for each category of affected products. No recalls of saccharin-containing products from commercial supply lines is planned.