The centuries-old practice of confining retarded persons in institutions segregated from the rest of society is an unconstitutional violation of their rights, a federal Judge in Pennsylvasia ruled last week.

U.S. District Court Judge Raymond Broderick's 72-page ruling could "sound the death knell" for large mental institutions across the country, said one of the attorneys in the case.

However, one of the federal government's leading experts on retardation said part of the factual basis for the decision is "not correct," and a Pennsylvania officials said the state is "very likely," to appeal the decision.

Broderick' decision came at the end of an eight-week trial - the longest in the history of cases involving mental institutions - centering on the huge Pennhurst Center in Spring City, just outside Philadelphia. Founded in 1908, it has 1,230 residents and a staff of 1,500.

He ruled that keeping retarded patients at Pennhurst violates their 14th Amendment rights to equal protection and a 1973 federal law aimed at encouraging rehabilitation in small community based facilities rather than mammoth institutions like Pennhurst.

"Retarded persons in large institutions suffer from apathy, stunted growth, and loss of IQ," Broderick ruled. "The smaller the living unit in which the retarded individual lives, the higher the level of behavioral functioning that is shown by the individual,"

Broderick did not detail what Pennsylvania should do to comply with his ruling. That decision will follow a relief hearing set to begin on Jan. 6.

Attorney Thomas Gilhool, who argued the case on behalf of parents of some Pennhurst residents, said the trial was not about "the usual horror shows and stories one usually associates with institutions, but about the chronic conditions" common to almost all large institutions across the country.

The decision "strikes down the 19th century institutions which segregated retarded people, just as the courts struck down segregation by race 25 years ago," he said.

Gihool said there are 180 public mental institutions in the United States housing about 230,000 retarded individuals.

He said such "large-scale institutions render individual attention impossible," while smaller institutions more reminiscent of the environment of home and family offer better care.

It is that part of the plaintiffs' argument that is rejected by Michael J. Begab, head of the Mental Retardation Research Centers' branch of the Department of Health, Education, and Welfare.

"There's not any real scientific evidence to support that view," said Begab. "For a given period of time, for some kinds of individuals, that kind of segregation might be best."

For the severely retarded, he said, "you can't provide the same extensive programs in small group facilities as you can in large facilities. . .

"Size is not a criteria that distinguishes between good and bad care. It's the way in which staffers are deployed and the amount of living space patients have that's important."

The suit that led to Broderick's ruling was filed in 1974 as a class action of parents of Pennhurst patients.