The Environomental Protection Agency gave detergent manufacturers the go-ahead yesterday to resume using a mild cancer-causing agent that was voluntarily dropped from use in 1970.

The chemical, nitrilotriacetic acid (NTA), was hailed as a substitute for water-softening phosphates when it was introduced early in 1970. Its manufacturers, Monsanto Industrial Chemical Co. and W.R. Grace Inc., said it would trap dirt particles almost as well as phosphates but would not boost the growth of algae in streams and rivers as phosphates did.

But a study by the National Institute of Environmental Health Sciences (NIEHS) found that NTA made heavy metals such as cadmium in the water much more toxic for test animals. Detergent makers agreed in December 1970 to halt use of NTA at the EPA's request.

Further research by the two firms and by Procter & Gamble Co., the nation's leading detergent manufacturer, found that NTA in high doses caused urinary tract problem and cancers in rats and mice. At low doses, the companies maintained no effects were observed.

They asked the EPA to review the evidence on grounds that only minuscule amounts of NTA would ever be present in drinking water.

In a statement yesterday, EPA assistant administrator Steven Jellinek agreed. The agency review, he said, had found that "projected levels of exposure from use of this substance in laundry detergents are generally low and therefore that associated risks would also be low."

Therefore, and because of "higher priority demands on all our limited resources," Jellinek said, "EPA sees no reason to take regulatory action against resumed production and use" of NTA.

Monsanto's environmental policy vice president, Monte Throdahl, hailed the decision as "good news for us." NTA, he said, is "a very useful product [that] serves a need no other product serves."

The EPA said Monsanto and Grace now produce between 70 million and 75 million pounds of NTA annually, of which 10 million pounds is used domestically in metal and institutional cleaning, textile treatment and industrial water applications. The rest is exported to Canada and Europe for detergent use under controlled conditions.

A Monsanto spokesman said the company exports NTA in bulk rail shipments for $36.50 per 100 pounds, making total production a $25.6 million annual business. Additional production could reach 275 million pounds in the first year, however, Procter & Gamble told the EPA.

Most areas of the country -- with the exception of several states around the Great Lakes, where the algae problem was most acute -- now allow some phosphates to be used in detergents. Throdahl said areas that do not allow phosphates are using detergents containing a complex metallic salt called zeolite, and that NTA would soon replace it.

He said he did not think it likely that NTA would replace phosphates nationwide since phosphates "are still a better product on a cost-benefit basis, other things being equal," but that no firm decisions had yet been made. b

"It depends on how much people will want," he said.

Jellinek, in a letter to Procter & Gamble research and development director W.C. Krumrei, said the EPA's action did not constitute an endorsement of NTA nor did it preclude future action in light of any new evidence.

He asked that the firm limit occupational exposure in the manufacture of the chemical, that it monitor environmental and health effects for a few years and that NTA not be used in skin-contact products such as shampoos or dishwashing detergents.