Attorney General Griffin B. Bell says Sen. Edward M. Kennedy's second-guessing of Bell's decision to allow a huge steel industry merger threatens their relationship.

Bell, in a letter sent to Kennedy on Monday but not released by the Justice Department until yesterday, called Kennedy's request for a Federal Trade Commission investigation into the proposed merger - already approved by Bell - "intolerable" and "particularly inappropriate."

"If this evidences your concern over my ability to discharge my responsiblilities, such an attitude would have unfortunate implications for effective future cooperation between us," Bell wrote Kennedy.

The dispute is particularly significant because Kennedy (D-Mass.) is slated to become chairman of the Senate Judiciary Committee.

Kennedy had asked the FTC to investigate the proposed merger of Lykes Corp. and LTV Corp., which Justice approved last summer.

Kennedy said in his letter to FTC Chairman Michael Perschuk that Bell appeared to have overridden the opinion of virtually all his antitrust staffers when he decided last summer not to oppose the merger.

Despite staff opinion to the contrary, Kennedy point out, Bell categorized Lykes as a failing company, a status that would make it exempt from certain antitrust restrictions against mergers.

"If the Federal Trade Commission were to institute such an investigation," Bell wrote to Kennedy, "that would also have an adverse impact on effective enforcement of the antitrust laws."

Bell said it would be "intolerable for the two agencies to undertake a course of action leading to review of each others' enforcement decisions. Not only would that ensure waste and inefficiency, it would also ensure unacceptable confusion and uncertainty in the business community."

Bell warned Kennedy in the letter that "if the FTC were to undertake an investigation, and legal proceedings ensued, I would feel compelled to have the antitrust divison participate. Absent some unforeseen change in cirumstances, the division would, of course, be supporting the DOJ's decision that Lykes Corp. was indeed facing the grave possibility of business failure without any less anticompetitive alternative than the proposed merger being available."

Bell's office and kennedy's office had refused for three days to release the Bell letter. Each said it would allow the other to release it, but would not do so itself.

In releasing it yesterday, however, Bell spokesman Terry Adamson said the attorney general was also denying reports that he had regretted sending the letter. "I believed in what I wrote when I wrote the letter," Bell said, "I believe in it now."

Bell has met with Kennedy twice since the letter was written, including dinner at the senator's home on Monday night. Yesterday, Bell said, "There is no problem between Sen. Kennedy and myself."

"We felt that it was an unusual case that merited review," Kennedy press secretary Tom Southwick, said yesterday. "That did not imply in any way that the attorney general was not doing his job. The senator has a very close working relationship with Attorney General Bell and will continue to work closely with him in the future."

The merger of the two firms would create the third largest steelmaker in the country, behind only U.S. Steel and Bethlehem.

Kennedy contended that losses at Lykes' Youngstown Sheet & Tube Co. were not as drastic as indicated by Bell when he made his decision not to oppose the merger.

FTC Chairman Pertschuk has called on his staff to "carefully evaluate" the letter and its implications. No timetable for a decision has been set, but one FTC spokesman said "it won't be too long."