An estimated one-third of all known snail darters, an endangered three-inch fish that has halted construction of a $116 million Tennessee Valley Authority dam, were killed Tuesday in a freak accident that experts suspect may have involved contamination of a fish net with an insecticide.

Ninety-eight of the estimated total population of 300 darters died a mysterious death Tuesday night as the TVA, bowing to a Fish and Wildlife Service order, was transferring some the controversial fish back to their breeding ground in shallow water above the Tellico Dam.

The Fish and Wildlife Service had insisted the darters would become extinct unless the TVA moved them upriver to their breeding grounds. This had to be done manually because the fish can't fight the current created by the still unclosed dam gates on the Middle Tennessee River. The dam has been halted pending Supreme Court review of the case, by a Sixth U.S. Circuit Court of Appeals order that accused the TVA of violating the Endangered Species Act.

Although TVA personnel make no claim that they love the snail darter, and their public information office sports a sign reading "Snail Darters Cause Cancer," no environmentalists or others have claimed foul play was involved in the kill.

The suspected cause of death is Rotenone - a natural insecticide favored even by organic gardeners - which apparently had contaminated a net or a boat supplied by the Fish and Wildlife Service to the TVA for the transfer.

Fish and Wildlife Service expert Hal Boles, who supervised the transfer was still attempting today to learn if the boat and net had been contaminated while it was on loan to agency personnel in Panama City, Fla.

Dr. Thomas Ripley, director of TVA's Division of Forestry, Fisheries and Wildlife, said the fish began dying after the net was used to transfer them from one styrofoam tank to another.

Jack Chance, chief of special projects under Ripley said, "We've transplanted them several times before, but we've never lost any unless somebody stepped on one or something."

Ripley said he would venture no firm guess on the cause of the accident until the fish are examined by a federal laboratory in Columbia, Mo. Ripley agreed with other TVA experts, however, that Rotenone - "a suffocant that blocks the ability of gill-equipped organism to breathe" - was suspected of causing the kill.

The TVA has appealed the court order blocking the dam to the Supreme Court and has asked Congress to modify the law, claiming that the snail darter species was discovered six years after the dam was begun and listed as endangered eight years after it was begun.

The Fish and Wildlife Service has disputed TVA claims that the endangered fish, a snail-eating member of the perch family, can survive in waters other than that of the still-unflooded Middle Tennessee River.

Asked why precautions were not taken to examine the net and boat for contaminants, Ripley said, "The chances of something like this are so damn remote, no one would think of it."