The federal government yesterday took the first step in an effort to eliminate cancer-causing compounds that are created when bacon is fried and that also may form in the stomach after processed meats are eaten.

In a joint action, the Agriculture Department and the Food and Drug Administration said that manufacturers of bacon and processed meats such as hot dogs, ham, salami, bologna, turkey ham and chicken hot dogs will have 60 days to prove that cancer-causing nitrosamines do not form when sodium nitrate and sodium nitrate are added to these products.

After that time the agencies will determine what action, if any, to take on nitrates and nitrates.

Nitrites and nitrates are used in color, flavor and preserve processed meats. They are known to combine with certain acid compounds in the stomachs of most species of test animals to form nitrosamines. These amines are found in foods, tobacco smoke and drugs. According to current only bacon forms nitrosamines before it enters the stomach.

Sid Butler, deputy assistant secretary of agriculture for nutrition and consumer services, said USDA is not proposing to ban bacon containing nitrites because it would only "cause chaos and congressional repercussions and we won't be able to control it."

Richard Lyng, director of the American Meat Institute, said the industry "can live with that. We are right on the edge of being able to give people assurance that there won't be any nitrosamines in bacon. We've already reduced the presence of nitrosamines to a very low level."

Another meat industry official said manufacturers are capable of blocking the pre-formed nitrosamines in bacon through the use of alpha tocopherol (Vitamin E) and sodium ascorbate.

The actions announced by the two agencies also address the more complicated problems of the need for continued use of nitrites and nitrates, and the safety of these substances, including the possibility that nitrosamines are formed in the human stomach when products containing nitrites are eaten.

The meat industry has contended that nitrites are essential in products to prevent the formation of deadly botulism toxins. However, small manufacturers have been producing nitrite-free products for years, using other means to prevent the formation of botulism spores.

The potential hazards of nitrite and nitrates have been the subject of controversy at USDA for several years. In 1973 the department convened a panel to investigate ways of reducing nitrites and nitrates in processed meats, but no action has been taken.

Butler said the nitrite problem "has been around here too long. At the very least we're damned and determined to get it out of the department."