A 44-year-old former Montgomery County special education teacher on trial for allegedly sexually molesting a 12-year-old student denied the accusations yesterday and testified that the boy was "extremely disturbed" and "lied all the time."

The former, Hunter Mulford, told a County Circuit Court jury the boy had been encouraged to make the accusations by a second student who was angry at Mulford for disciplining him.

Mulford testified that the boys did come to his room one night last September during a school trip to the Lathrop Smith Center in Rockville. However, Mulford denied that he engaged in a sexual act with either student.

Mulford has been on administrative leave from Newport Middle School in Kensington since the two boys made their accusations in late January. He is appealing the recommendation of School Superintendent Charles M. Bernardo that Mulford be dismissed.

Mulford is charged with committing a third-degree sexual offense, involving sexual contact with someone under 14 years of age by an individual at least four years older. He is also charged with assault and battery and committing an unnatural sex act.

The charges involving the second boy were dropped Tuesday after the 11-year-old repeatedly respond, "I don't remember;" when questioned about what happened that night.

Mulford has taught in Montgomery County schools seven years, specializing in teaching students considered slow learners.

A resident of McLean, Mulford has also been charged with five counts of second and third-degree sex offenses by Maryland State Police in a separate case in Frederick.

The four days of testimony in the Rockville courtroom has centered on the question of the boys' reputation for truthfulness. Several of the boys' classmates and several of Mulford's colleagues has testified that the boys had a "poor" reputation for truthfulness and that the 12-year-old was easily led by his 11-year-old friend.

However, the mother of the 12-year-old and several of his neighbors testified yesterday that the boy was trustworthy and honest.

Mulford testified yesterday that, on the night of the alleged incident, the two boys came into his room and asked for back rubs, which he gave them.

He also gave the boys candy, "frankly as sort of a bribe to keep them quiet." Among the dozens of children in the large outer room of the cabin, Mulford said, the two were the noisiest.

However, although he had a bottle of wine in his room for his insomnia, Mulford said, he had not offered the boys a drink as they had alleged.

Mulford said he singled out the two boys for special attention in the ensuing months - driving them home from school, and treating them to candy, presents and trips to a pinball arcade - to increase the boys' sense of selfworth. "I wanted to show them 'I value you.' . . . It seems to suggest I was trying to buy their affection or their favor, which is not the case."

Closing arguments and the judge's instructions to the jury are scheduled Monday before the case goes to the jury of six men and six women.