The Environmental Protection Agency has reversed its position on some controversial hazardous waste permit regulations and tentatively agreed to settle a court challenge on terms favorable to industry after a series of high-level meetings that excluded the EPA and Justice Department lawyers assigned to the case.

The Justice Department attorney, Nancy Long, withdrew from the case in protest. The department traditionally has guarded its right to be the government's chief attorney on agency cases.

Officials of the department's Land Division declined to discuss the matter, but another kn owledgeable Justice official said yesterday the EPA had been "admonished" for excluding the department attorney.

While the changes in the EPA regulations are not yet in final written form, agreement on several key issues in a suit was announced at a meeting of the parties at the EPA last week, according to several participants.

The proposed settlement terms would allow industries to receive permanent, rather than 10-year, permits to construct waste dumps; to expand existing facilities by up to 50 percent without EPA approval, and to build any hazardous waste holding facility except a landfill without prior government approval of the site, according to Khristine L. Hall, an attorney for the Environmental Defense Fund, and John Austin, a lawyer for the American Mining Congress.

"This clearly is a weakening of regulations already in place, and will mean a weakening of the protection of the public's health," Hall said. The fund has 45,000 members nationally.

Austin, whose trade association represents major mining companies, said it was fair to call some of the proposed changes a reversal of EPA positions, but said industry also made some trade-offs. "There seems to be general agreement on a package that would settle" the suit over the permit regulations in the Resource Conservation and Recovery Act of 1976, he said.

Frank Shepherd, associate EPA administrator for legal counsel and enforcement, declined to discuss the substance of the negotiations and insisted that no settlement has been reached.

He said he did decide to hold separate meetings with three industry groups and the fund earlier this month, without the line government attorneys, to promote franker discussion of the issues.

He rejected Hall's assertion, in a letter to him, that the private discussions were an abuse of the negotiating process and gave the appearance of impropriety. "That's flatly untrue," he said. "I've been practicing law for nearly 10 years and there's nothing unethical about negotiating settlements, meeting separately or together."

Shepherd said it was his idea to have only Whit Field, a special assistant to EPA Administrator Anne M. Gorsuch, join him in representing the government at the "informational" sessions. "I'm the head lawyer here," he said. "I'm capable of representing the agency as a lawyer."

The regulations in question were designed to set requirements for tens of thousands of hazardous waste landfills, and dump sites used by the solid waste, chemical, oil and mining industries. They were filed in May, 1980, and immediately challenged in the U.S. Court of Appeals here.

The opposing sides negotiated with the government for months, until EPA officials suggested hearing from the major industry and environmental groups separately earlier this month, Shepherd said.

The Environmental Defense Fund declined to take part in the discussions, Hall said, because the government attorneys of record weren't present. Lawyers for the Chemical Manufacturers Association, the American Petroleum Institute and the American Mining Congress did attend the sessions, Shepherd said.

Dave Carroll, a lawyer for the chemical group who did attend one of the sessions, said he felt Shepherd and Field wanted to hear industry's position before making policy decisions.

Both Carroll and Austin, of the mining congress, said industry challenged the permit regulations because they weren't practical. The proposed agreement, Austin said "reflects more than a reversal [by the EPA]. It reflects the real world." He said expansion of existing waste facilities without lengthy permit processing, for instance, is needed because of a need for greater capacity in waste sites.

Building new facilities without pre-construction site permits is favored by industry because it saves time, especially in areas of the country where weather on terrain limits construction time, Austin added. The lifetime permit will remove uncertainties that hampered financing, but will be offset by provisions to reopen the permit to add new regulatory requirements, he said.

The environmental fund's Hall said her group will refuse to sign any settlement along the lines announced at the Aug. 17 meeting at the EPA "because we don't agree with the positions that were reached on how they were reached."

EPA's attorney on the case, Lisa Friedman, said she thought it was unusual that neither she nor Justice's Long was invited to the separate negotiating sessions involving Shepherd, Field, and industry representatives."It's the first time anything like that has happened in my four years here," she said.