The Environmental Protection Agency has halted efforts to ban the controversial herbicide 2,4,5-T, which was used in Vietnam as part of Agent Orange, and instead has begun negotiating a settlement with the manufacturer, Dow Chemical Co.

EPA officials refused to discuss the decision, the latest in a series of efforts to get out-of-court agreements in longstanding environmental and regulatory controversies. "Neither party has abandoned its position in the litigation, but both believe the discussions might prove fruitful," an EPA spokesman said.

The Reagan administration recently asked the Supreme Court to delay a verdict on the constitutionality of regulations governing textile workers' exposure to cotton dust while the rules are under review. And the Justice Department has opened talks with all parties involved in a U.S. Court of Appeals case challenging 30 regulations for strip mining and land reclamation.

In the latest move, EPA and Dow asked Administrative Law Judge Edward B. Finch to recess his hearings on March 24 after more than a year of testimony on EPA's proposal to ban all uses of 2,4,5-T. The three-week halt was extended yesterday to May 12 at the request of both parties, with a progress report to be submitted May 8. Dow spokesman Rich Long described the talks as "rather delicate," speculating that EPA officials sought the agreement because "it's fairly clear they didn't make their case."

Sources within the chemical industry said talks so far had concerned the wording on more restrictive labeling that the EPA could require for 2,4,5-T containers in exchange for allowing its continued use. Details of the negotiations on the labels' warnings or restrictions on use are not known.

More than a year ago, on March 14, 1980, the EPA began its effort to show that 2,4,5-T and its sister chemical Silvex are related to miscarriages, cancers, liver disease, other reproductive problems and death among those exposed to it. The villain in EPAs scenario is dioxin, an unavoidable contaminant of the herbicides, which has been called the most toxic substance known. Hundreds of Vietnam veterans are seeking federal benefits and have filed lawsuits charging that they or their offspring were harmed by exposure to Agent Orange.

During the first round of testimony before the administrative law judge, which took 10 months, the EPA produced scores of witnesses and studies to support its position that 2,4,5-T is too risky to allow its continued use in forest underbrush control and roadside weedkilling, for which Dow now sells about $12 million worth of 2,4,5-T each year. The EPA banned other uses of the chemicals in 1979 after women near Alsea, Ore, complained that a rise in their miscarriage rate followed spraying of nearby forests.

Dow offered rebuttal witnesses and was preparing to open the benefit side of the testimony, in which it would try to show that the herbicide performs valuable tasks that other chemicals cannot do. "We haven't been interested in a halfway solution," Long said. "We have contended all along that the product is safe and useful."