One of the nation's biggest chemical waste companies is under federal investigation for an alleged pattern of illegally disposing of toxic wastes by mixing them with oil used to surface dirt roads in Texas.

So far, Five subdivisions in East Texas have been identified as having streets covered with the tainted road oil during a five-month period last year. Along one street in Corrigan, Tex., residents reported headaches, respiratory problems and livestock deaths shortly after the oil was put down.

Officials of Houston-based Browning Ferris Industries, the country's biggest handler of solid and chemical wastes, say that this illegal dumping of hazardous substances, which is admits to, was against company policy and practice and that an internal investigation has begun.

But federal prosecutors say they have been told by company employes that there was a deliberate and widespread pattern over a period of years of adding toxic waste to used motor oil that was given free to contractors as a surfacing materials for dirt roads.

The allegations against Browning-Ferris came to light after a former employe claimed he was fired for refusing to dump toxic wastes into used oil. Browning-Ferris declined to comment on the employe's allegations.

The disclosure of the tainted road oil comes at a time of heightened national concern over the manner in which industry disposes of potentially hazardous chemical wastes that can cause illness, other adverse health effects or even death among people exposed to them.

On a more local scale, the incident coincides with a growing number of cancer and leukemia studies along the Texas Gulf Coast. Here, 31,000 people produce 60 percent at the pertochemicals made in the United States - a total of $2.6 billion worth last year.

But there is a increasing concern that this prospering industry, the engine behind much of Texas' growth and prosperity, may have serious adverse side effects.

Investigations into the Browning-Ferris incident have been started by the U.S. Environmental Protection Administration, the state water quality agency, the U.S. attorney's officer and the House subcommittee on oversight and investigations.

Assistant U.S. Attorney Heriberto Medrano in Tyler, Tex., said information should be presented to a grand jury for possible criminal indictments in four to six weeks in connection with the illegal disposal by Browning-Ferris.

"There was a pattern of illegal dumping," Medrano said, "and we're now trying to determine the illegal dumping sites. We have allegations by several employes that this has been going on for years."

Don Ditch, vice president for marketing of Browning-Ferris Industries, said the company is cooperating with investigators and is concerned with the removal of any potentially hazardous road surfaces associated with the waste oil it gave out.

"If our investigation shows any deficiencies," Fitch said, "we will take immediate prompt action. Well feel it was an isolated instance, contrary to our policies and procedures."

The five subdivisions found with toxic wastes in road surfaces, however, involve oil put down beginning in mid-June of last year and continuing into November. And Medrano said the allegations indicate that "several people in management knew about this."

Because the disposal of toxic wastes is regulated by the state, Medrano said, the investigation could also eventually include public employes who oversee such operations.

Many of the chemicals produced here must also be disposed of after use, and Browing-Ferris' chemical services division does just that. Last year the company reported $50 million in revenues for chemical waste disposal in 10 states out of a total of $363 million in total waste handling operations. It is the nation's largest waste disposal company.

The company is licensed by Texas to dispose of toxic waste in such places as deep wells designed safely to isolate hazardous substances, including nitrobenzene, an industrial solvent.

Excessive inhalation of nitrobenzene can cause immediate death, and the federal government says prolonged exposure to the substance causes cancer.

Nitrobenzene and traces of cyanide were found in a road sample taken from the Reiley's Village subdivision in Polk County, Tex. The tests were run after former Browning-Ferris employe Melvin Grizzard told the Port Arthur News about the mixing of nitrobenzene with waste oil.

The News's sample came from a road covered with waste oil from Browning-Ferris last October and November. Soon after cattle died in a nearby pasture and residents complained of breathing problems and headaches.

The News said it found tainted road oil in seven southeast Texas counties, and Medrano, the federal prosecutor, said the total could run as high as 11. He said he had no evidence at this time of problems in other states where Browning-Ferris disposes of chemical wastes.

Browning-Ferris is now removing the surface form the road, but, meanwhile, four other subdivisions have proved to have nitrobenzene in the oil surface. The company is paying for the removal and resurfacing in all five instances.