In a battle punctuated by maybes, mights and perhapses, federal regulators and environmentalists have squared off on either side of a mountain of sewage sludge.

Their fight centers on what the Environmental Protection Agency intends to do about huge quantities of toxic cadmium that show up in the sludge - the leftover waste - from sewage treatment plants.

The implications are enormous.

To make sewage sludge cadmium-free could cost American cities, particularly the big industrial centers, billions of dollars to upgrade their treatment plants and sludge management.

In adequate treatment and sludge-handling could intensify public-health problems by releasing more cadmium into food and water supplies.

Cadmium is a heavy metal, a trace element in living systems which also happens to be highly toxic - capable of causing birth defects, chromosome damage, irreversible kidney damage, tumors and possibly cancer.

Most cadmium gets into sewage treatment plants as part of the discharge from electroplating processes, from disintegration of rubber tires on city streets, from the use of solder in plumbing.

There is no argument about a couple of points: Cadmium is a menace and cadmium appears, sometimes in large amounts, in the sludge produced by sewage treatment plants.

There also is no argument that about a fourth of the estimated 25 billion gallons of daily sludge production ends up as fertilizer and soil conditioner for farms and home gardens.

But the maybes, the mights and the perhapses - that is, the uncertainties about how much cadmium is unacceptable, how to keep it out of water and food, how high the control costs - intensify and cloud the dispute.

Through three different federal environmental laws, each with a different shading of jurisdiction, EPA is the agency that must oversee the controlling of cadmium and other hazardous substances in sludge.

EPA has been notified by four environmental groups that they intend to sue th agency to force it to issue long-overdue regulations aimed at tightening procedures for dealing with cadmium.

Beyond that, however, environmentalists charge that, despite findings that raise serious questions about the public-health menace from cadmium, EPA is dragging its feet on issuing regulations.

Environmental Action Foundation in Washington and the Chicago-based Citizens for a Better Environment maintain that EPA is "putting economics ahead of public health" in delaying regulations.

"Economic forces are pushing the cities toward putting more sludge on the land as a fertilizer - they can't burn it or dump it in the ocean," said Liz Tennant of the foundation."If cities move to more agricultural use, there will be more cadmium in our food. Studies show that we already are at a dubious level of cadmium intake."

Added Bill Forcade, attorney for the Chicago group: "The EPA is dragging its feet while our food supply is being poisoned with cadmium."

Dana J. Davoli, a staff scientist with CBE, said that data compiled by the United Nations and the U.S. Food and Drug Administration, dealing with cadmium damage through diet, justify immediate and stringent controls on sludge by the EPA.

"The more recent evidence showing it to be oncogen [a tumor causant] strengthens this position, since a 'safe' level for substances that cause tumors has never been demonstrated," Davoli said.

The presence of cadmium in drinking water has been correlated with cancer of the pharynx, esophagus, intestine, larynx, lung and bladder.

It also causes alterations in kidney cells that prevent the organ from separating protein from wastes that are passed through the body. Persons suffering cadmium-induced kidney damage pass protein through their bodies, along with wastes, a condition that can lead to kidney failure and death.

With more than 1 million tons of sludge dumped yearly on U.S. agricultural land, with much of it containing large amounts of cadmium and with wider use of sludge as a fertilizer envisioned, the health concerns grow.

"We agree," said Tenant of Environmental Action, "that the data is less than clear about what is hazardous level of cadmium, but the levels being recommended by EPA [in sludge] are excessive even in the realm of present data. That is reason for EPA to go on the side of caution."

Critical in the dispute between EPA and the environmentalists, as well as within the agency itself, is the question of how much cadmium is a hazard.

One EPA study of sewage treatment plants in the nation's 26 largest cities found that two-thirds of their daily sludge production contained potentially hazardous levels of cadmium, using an arbitrarily selected number to represent a "hazard."

Taken by itself, the sludge with its cadmium content could be considered hazardous, EPA officials say. But further questions include how much of the cadmium is picked up by plants when the sludge is applied to land, how much is transmitted to fruit and vegetables and how much leaches out of landfills, where another one-fourth of today's sludge is buried.

"No one argues that cadmium is not dangerous at certain levels," said Swep Davis, a deputy assistant administrator of EPA's water-treatment programs.

"If the sludge is put in a good landfill, it may not be dangerous at all. But if it is put at certain rates on agricultural land, it is dangerous," he continued. "Our problem is in finding a balance."

"For a long time we have been regulating water without looking at sludge," Davis said. "Now, for the first time, with the 1976 Resource Conservation and Recovery Act, the Clean Water amendments of 1977 and the Toxic Substances control law, EPA has the power to look at the total picture."

"It is true we have missed deadlines for issuing regulations, but anyone who claims it is intentional or selling out doesn't know what the hell he is talking about," Davis said. "It is just not the case that we are putting economics first."

Davis said EPA continues to assess "the full circumstances" of cadmium content in sludge. And, he added, "there is some scientific debate about the cadmium level itself and what is hazardous, what is the uptake rate of cadmium into plants and how much of it goes into the body."

Steffen W. Plehn, an EPA deputy assistant administrator for solid waste programs, agreed with Davis' assessment of the agency's difficulty in meeting its regulatory deadlines.

"There is nothing sinister going on at all," Plehn said. "It is just a problem of deciding what the best policy is and then what the best vehicle is for carrying out the policy. It's unfortunately been the case in quite a number of incidents that we have not been able to meet the deadlines Congress has set for us. This is highly complex and is taking us longer than Congress probably assumed when it set the deadline."

Both he and Davis rejected the suggestion that EPA is under White House pressure to go slow on producing regulations that might substantially increase pollution-control expenditures.

"There are always questions about costs, and we're being asked to measure costs against benefits," Plehn said. Added Davis: "EPA and the White House always are aware of economic pressures.But I am not aware of any outside pressures on us."

Cost implications run deep. If, for example, EPA decides that current levels of cadmium in sewage sluge are "hazardous," dirt and expensive dispoal requirements would be in order - including depositing the vast quantities of contaminated sludge in permanent leakproof capped tombs.

Or, to cite another example, if it is determined that today's sludge is not suitable for continued widespread use on farms, then municipalities would have an additional disposal problem - where to put it, and how to pay for putting it there.

Another possibility, disclosed in an EPA memo obtained by attorney Forcade, is that the agency could declare that sludge is exempt from coverage by the regulations - a move that Davis indicated was unlikely.

Forcade described that memo and another obtained by CBE as signs that EPA is stalling and considering options for reducing the scope of regulation it eventually will issue.

Not so, said Davis of EPA, "I wouldn't understate the cadmium problem, but it is simplistic to think it can be solved easily," he said.

"Because of the complexity of this, there are legitimate reasons for not moving more quickly."