The Virginia Highway Commission decided yesterday to reconsider its controversial rerouting of the Springfield Bypass following the recent disclosure that its Northern Virginia member owns properties along the route.

State Attorney General J. Marshall Coleman later criticized the commission for failing to immediately rescind its route decision and said that Commissioner William B. Wrench of Fairfax clearly violated the spirit of Virginia's conflict-of-interest law by his vote on the matter.

Deputy Attorney General Walter A. McFarlane, who investigated the issue for Coleman, said Wrench did violate state law in January by failing to list his properties in his annual disclosure form. But McFarlane said he would not recommend prosecution because he had found no evidence that Wrench willfully broke the law.

Wrench, who yesterday apologized to his fellow commissioners for not telling them of his holdings, joined in their unanimous rejection of Coleman's advice to repudiate their initial decision on the $200 million Fairfax County highway. The commission agreed only to review its route and Chief Highway Commissioner Harold King later predicted the 10-member commission would stand by its decision when it next meets in October.

Coleman said that because Virginia's conflict-of-interest law is "unsatisfactory and in need of improvement," he could find nothing illegal in Wrench's votes on the highway. "Although there is no technical conflict, it is clear to me that a vote on this issue would violate the spirit of the law," Coleman said. "In the interest of preserving public confidence in the actions of the highway administration, Mr. Wrench should have abstained."

Coleman said Wrench acted in good faith by informing King of two of the three parcels he owns along the route, but the attorney general faulted King for not passing that information to state lawyers. Those attorneys normally attend commission meetings, Coleman noted, but he said they were not invited to the Aug. 20 meeting at which Wrench recommended and voted for the Springfield Bypass route.

"It is logical to assume that he Wrench will benefit financially from adoption of the new route," Coleman said. "Mr. King erred in not seeking the advice of legal counsel when he was notified of a potential conflict."

Neither Wrench nor King could be reached for comment after the release of Coleman's report late yesterday afternoon. Both said earlier they believed Wrench had acted properly.

"I have nothing to hide," Wrench told United Press International. "Of all the things I have done on the highway commission, I am proudest of the alignment on this road.

"When the smoke all clears, there's going to be no way to assail the state highway department's selection of the route," Wrench said.

Virginia Democrats, noting that Wrench is helping Coleman finance his Republican gubernatorial campaign, have questioned the attorney general's objectivity in probing the case. Lt. Gov. Charles S. Robb, the Democratic candidate for governor, told Coleman in a Vienna debate yesterday that he was "ignoring conflicts of interest so recognizable to everyone else . . . . "

On Wednesday, Coleman campaign officials said they will return a $1,100 campaign contribution from Wrench to avoid "any appearance of a conflict of interest."

Fairfax officials were also unhappy with the commission's action, although for different reasons. "I certainly wish they had taken Marshall Coleman's recommendation and rescinded their action, so we could start at ground zero," said Fairfax Board Chairman John F. Herrity. "It sounds to me more like a legal formality than a substantive consideration."

Herrity, who said he will visit Gov. John N. Dalton to plead the county's case, stressed he was concerned with choosing the best route and not with the propriety of Wrench's vote. All nine Fairfax County supervisors oppose the state rerouting.

The highway commission rejected about 10 miles of the 35-mile route that Fairfax officials had proposed in June for the cross-county highway. The changes brought the road closer to two business parcels and one vacant lot owned by Wrench.

The new route also places half of an interstate cloverleaf on a 387-acre tract owned by Milton V. Peterson and Wrench's lawyer, John T. Hazel Jr., who own land along both the county and the state routes. Coleman said in his report that Hazel, who serves with Peterson and Wrench on his GOP finance committee, "would undoubtedly receive some financial benefit from the selection of either route."

Highway chief King said at the commission meeting that he "had already determined there was no conflict of interest in his Wrench's participating in the vote because his land was not adjacent to the road but some 1,800 feet away," King added that Wrench merely followed highway staff's advice.

Wrench acknowledged a lack of "diligence" in not disclosing his interests to his fellow commissioners. "I would have to share in hindsight in some of the concern expressed here," Wrench said. "I had not given it that much thought."

After the commission vote, MacFarlane issued a statement attacking the action. "He Coleman feels very strongly that the vote be rescinded, that the matter be reviewed in its entirety at a future commission meeting and that a new vote be taken with Mr. Wrench taking no part," the deputy attorney general said.