American Airlines yesterday paid a $500,000 fine "under protest" to settle all civil claims with the Federal Aviation Administration concerning the now-banned procedure for mounting engines and pylons the airline had used on DC10 jetliners before the Chicago crash May 25 that killed 275 people.

At the same time that it paid the fine -- the largest penalty ever paid by a commercial airline in an FAA civil enforcement -- American denied violating any regulations or any liability.

Continental Airlines, which used the same engine and pylon mounting procedure, paid a $100,000 fine yesterday, while also denying liability. Both airlines said they paid the fines to avoid the expense of prolonged litigation.

The fines grew out of the investigation that followed the American Airlines DC10 crash. Although the "probable cause" of that crash has yet to be officially determined by the National Transporation Safety Board, it has been apparent for months that the engine and pylon-mounting procedure is a prime candidate.

In the Chicago crash, the engine and pylon under the left wing of the American DC10 fell off just as the airplane was lifting off the runway. Vital electrical systems and hydraulic controls were torn away. The plane rose to several hundred feet above the ground, rolled to the left and crashed.

Investigators subsequently found a long crack in one of the major supporting braces that attaches the pylon to the wing. The discovery led them to the American and Continental maintenance procedure.

Under that procedure, the engine and pylon were removed for maintenance as a single unit, then reinstalled as a unit. Testimony in hearings and an investigation by the FAA have demonstrated that the extra leverage created by the engine's weight subjected the pylon supports to possible cracking during reinstallation.

The crashed American jetliner was found to have undergone an engine and pylon removal and reinstallation at American's maintenance base in Tulsa two months before the crash. Witnesses at a safety board hearing in Chicago testified that a crack may have occurred during that maintenance, but in any event the crack grew under the stress of continued flights until the vital support failed. American has contended that McDonnell Douglas, the DC10 manufacturer, had approved the maintenance procedure.

In his letter accepting the American Airlines payment, FAA chief counsel Clark H. Onstad cited other maintenance violations FAA investigators had found in the pylon area.

According to Onstad's letter, a DC10 was returned to service without a safety bolt being installed in a pylon support area and in another case a stiffener of a pylon rib was improperly repaired. The letter also charged that American's "maintenance/inspection program failed to ensure that each aircraft returned to service was airworthy. . . . "

Still pending are civil lawsuits totaling millions of dollars, that have been filed by survivors of the American Airlines crash.