D.C. Police Chief Burtell M. Jefferson has decided to reinstate controversial Deputy Police Chief William Trussell to his former command after an investigation into Trussell's competence and a racial remark Trussell allegedly made.

The decision, expected to be announced today, was made in the face of apparent disapproval by Mayor Marion Barry and a three-member police panel appointed by Jefferson last May to investigate the charges. The panel voted 2 to 1 against Trussell's reinstatement.

Trussell will resume command of the Criminal Investigations Division, which includes the elite homicide squad that leveled the charges against Trussell in an unusual public action.

Barry, who has monitored Jefferson's handling of the controversy, indicated he had reservations about the chief's decision to reinstate Trussell.

"On this issue, the chief had his way," the mayor said. "I was not saying let's do it, let's not do it. There are a lot of things in this government I'm not happy with."

Jefferson and Trussell declined comment yesterday.

Barry said he felt the controversy was a "management problem" to be handled by the police chief and not a policy matter requiring his active involvement. Barry said he had been informed of the chief's decision.

"I have faith that the chief can live with his decision. If this doesn't solve the problem, I'll have to review my role," Barry said.

Jefferson's decision drew bitter comments from homicide squad detectives, who had charged that Trussell, a 30-year veteran of the force, jeopardized major homicide cases by interfering in investigations.

"The whole thing stinks to high heaven," one squad member said. "I mean, we're being made to look like idiots." The detective said the whole squad "is in a state of shock."

Police union president Larry Simons denounced Jefferson and called on the city council to investigate the chief's handling of the Trussell affair.

Simons and the detectives also sharply criticized Jefferson's reported intention to transfer Capt. Arif Mosrie, commander of the squad. Jefferson has been reported as saying Mosrie should have quelled the revolt. Mosrie, who initially tried to diffuse the controversy, later told the investigating panel that he had to agree with his men on several issues, including the alleged racist remark.

"This just indicates the word of the chief of police is not worth a damn. He made it clear in that meeting (May 9) that there would be absolutely no reprisals, no transfers, that we were free to speak our minds without fear . . . " one detective said.

Another said, "Morale is smashed and that's got to be bad for productivity. By this action . . . they've told us they're not interested in morale . . . they'd rather protect one of their own no matter how big a fool he is."

"It's a scrambled egg mentality," one detective commented, noting Jefferson's recent decision to distinguish high-ranking officers with gold braid caps.

The special police panel that Jefferson appointed spent more than three months interviewing the detectives and poring over hundreds of pages of statements.

There were repeated reports of disension within the panel, with Assistant Chiefs Maurice Turner and Marty Tapscott siding against deputy police counsel Richard Brooks, a civilian, on both the racial slur and the incompetency charges.

After a three-week review of the racial allegation, Turner and Tapscot, who are black, voted to temporarily remove Trussell from his command pending the outcome of the hearings on the incompetency charges. Brooks, who is white, dissented. Jefferson agreed with the reassignment of Trussell to a lesser post in the Field Inspections Bureau.

Six detectives and Mosrie testified that on at least two occasions Trussell, who is white, said: "Not all people go into shock when they are shot. Animals don't go into shock and neither do blacks."

Jefferson reportedly concluded recently that Trussell, 51, had been quoted out of context or misunderstood.

However, Mayor Barry remained critical of the episode, saying yesterday, "I don't care how [it was] made, [it] shouldn't have been."

The panel's subsequent investigation into the more than two-dozen specific allegations of incompetency against Trussell continued for more than two months, causing Barry to complain several times about the delay. Barry remarked yesterday that the investigation had "dragged on far from the time I thought it would be going on."

Turner and Tapscott were reported ready to end the investigation a month ago but agreed to Brooks' request for numerous "call black" interviews.

Brooks has declined to discuss his role in the investigation. The controversy, which had apparently began brewing shortly after Trussell was named chief of detectives last September, came to a head last May when he abruptly transfered veteran homicide Lt. Raymond Pierson. Pierson had quarreled with the deputy chief over Trussell's handling of a case involving the drowning death of a 5-month-old baby at the Capital Hilton Hotel.

It was the catalytic event for most of the 45 men in the squad, who had been grumbling privately about Trussell's alleged mishandling of several earlier investigations.

Forty-two of the 45 detectives signed a letter to Jefferson expressing their collective rage" over the transfer. Pierson had talked the detectives out of a mass walkout.

The letter was given to Capt. Mosrie, who declined to forward it to Jefferson and advised the men that such an action would be "counterproductive" and could enflame the situation. Pierson retired a few weeks later.

The squad members then began drawing up a detailed complaint against Trussell, specifying the racial remark and three homicide investigations that they claimed he had bungled.