The Carter administration yesterday proposed legislation to penalize cities and towns across the nation that fail to reduce their water use by 15 per cent.

In a carrot-and-stick approach, the Environmental Protection Agency could withhold partial funding of multimillion-dollar sewage plants unless cities enact water conservation ordinances.

The ordinances, which would come into effect as cities receive sewage treatment grants over the next 10 years, would require homeowners to install toilet dams and special shower heads to save water. Industries could be forced to alter manufacturing processes and recycle water.

In proposing water conservation measures to the Senate Environment Committee yesterday, Assistant EPA Administrator Thomas Jorling said: "In a nation that is facing increasing problems of water scarcity, within a world environment never removed from the grim specter of famine, conscientious public policy demands no less."

Jorling also said the agency will continue to insist that communities charge sewage user fees keyed to the amount of water consumed. Cities such as Chicago that finance sewer plant operations through property taxes have been fighting EPA's user charge requirement. Other cities prefer that industry subsidize residential use or vice versa.

EPA's water conservation carrot is a $45 billion program to finance 75 per cent of municipal sewage plants over the next 10 years. But if cities don't cut down water use, EPA proposes to fund only 70 per cent of the plants - a penalty that could amount to millions of dollars for some financially strapped communities.

Water conservation represent a new emphasis in federal policy although some localities, especially in drought-plagued California, already have enacted strict conservation measures. Washington is among many Eastern cities, including some in Florida and Georgia, that have only recently become aware of water shortages.

Jorling said EPA will also try to change the types of sewage plants cities build. "Municipal treatment technologies [have] become hideebound," he said, accusing the agency of "inertia" in promoting recycling of sewage water for irrigation and land treatment systems to use sludge for fertilizer or mulch.

Such innovative systems should receive priority funding. Sen. Wendell R. Anderson (D-Minn.) suggested yesterday.

Sen. Pete Domenici (R-N.M.) said, "If we don't bring new technology on board, we're going to be spending billions of dollars to do the same type of water treatment we did 15 years ago. It's ridiculous."

Despite lobbying by cities and industries, the administration declined to recommend any delay of water cleanup deadlines. Seventy per cent of cities and towns will violate the 1977 deadline for 85 per cent cleanup which takes effect today. Jorling said the agency will ask for extensions on a case-by-case basis, but will take recalcitrant cities to court.

Industry, which has largely complied with 1977 deadlines, has been demanding that Congress postpone 1983 deadlines calling for installation of millions of dollars worth of the best water cleanup technology available. However, Jorling said yesterday that that 1983 requirements are needed because even if all cities and industries complied with 1977 deadlines. 20 per cent to 35 per cent of the nation's waters still would not support fish.

The 1983 requirements allow EPA to begin a comprehensive program to control toxic chemicals not affected by the 1977 standards addressing nutrients and dissolved oxygen.

The administration also declined to support and major change in federal protection for wetlands - one of the most controversial aspects of the water legislation. Prompted by heavy lobbying by farmers and industries, the House has passed a law severely restricting the Army Corps of Engineers' permit program for dredging and filling around the nation's streams.

"Our remaining swamps and marshes . . . provide the breeding areas for fish and wildlife, remove and recycle pollutants and buffer the destructive effects of storm and flood waters," Jorling said.