esponding to the threat of the Mediterranean fruit fly, the Food and Drug Administration has softened its long-held ban on treating produce with gamma rays, in a move that could revolutionize the food industry.

Agency spokesman Jim Greene said Commissioner Arthur Hull Hayes Jr. has granted conditional permission to a San Jose firm, Emergent Technologies, to begin irradiating produce.

The $10 million irradiation plant proposed by the firm, if it passes several federal requirements, would be the first in this country to put food irradiation to full commercial use.

State and federal officials, applauding the move, say gamma rays may be the only way to treat fruits in new infestations by the Medfly or other pests if a popular chemical fumigant now in use is banned for being a suspected cause of cancer.

But the gamma ray process also has the even more significant capability, confirmed by Army tests and commercial use in Europe, of greatly extending the shelf life of milk, bacon and other foods.

"This has wide-ranging implications," said Frank Bragg, a spokesman for the University of California at Davis, where experiments with the gamma ray process are continuing. "There is going to be a multimillion-dollar industry springing up very quickly with the FDA approval."

A potential stumbling block, scientists and government officials acknowledge, is consumer fear of anything to do with radiation.

Hayes, in a letter to White House science advisers, said, "Irradiation of food poses no danger to consumers."

Niel E. Nielson, president of Emergent Technologies, said in an interview that "this is just as safe as drying the food in the sun, or broiling it," both processes involve radiation.

Although the Army has been experimenting with gamma ray treatment of food since the 1940s, commercial food processors have declined to make a great effort to develop radiation facilities because refrigeration or chemical fumigation could do the job more cheaply.

Rising energy costs and new research on the harmful affects of many chemicals have led some to reconsider irradiation, however.

Nielson said his company has been lobbying Congress and the FDA for years to lower restrictions on the use of irradiation.

"Then those little bugs changed the situation quite drastically," said Manuel C. Lagunas-Solar, chief of the UC Davis experimental program on irradiating food.

Although dormant this winter, the small fly, whose larvae can spoil dozens of varieties of fruits and vegetables, remains a serious potential threat to California's $16 billion agricultural industry, and to growers in other states.

With the chemical fumigant ethylene dibromide (EDB) now strongly suspected as a potential cause of cancer in workers who come in close contact with it, the growers and the FDA have been eager to promote an alternative method of treating infested fruit.

According to Greene, FDA Commissioner Hayes was able to grant an exemption from regulations restricting irradiation of food in the United States by classifying the Medfly situation in California as an emergency.

Greene said the agency will still require, however, that Emergent Technologies assure worker safety marketability of the irradiated produce and a radiation dose of no more than 100 kilorads before final approval for the project is given.

Dick Thompson, spokesman for the California Department of Food and Agriculture, called gamma ray treatment "a good process, it's been used in Europe for some time."

He said some American stores now sell an irradiated milk produced in Europe that can remain on a kitchen shelf without spoiling for months because the decay-causing bacteria have been killed.

Lagunas-Solar said the irradiated food is safe for consumers but that processors must be careful not to overdose softer fruits, which could suffer skin damage or spoil more quickly because of the treatment.

Gamma rays are used in this country to sterilize medical instruments and bandages, as well as food for patients in some hospitals and for National Aeronautics and Space Administration astronauts who must remain in space for a long time.

Greene said the federal government approved irradiation treatment of potatoes and wheat in the 1960s, but processors decided not to spend the money to build the proper facilities.

According to Nielson, a plant capable of handling thousands of tons of produce each day could be ready within a year if the plan received full government cooperation.

Crates of produce in metal containers and moving on conveyor belts would enter large rooms with thick concrete walls where it would be exposed to cobalt 60, a powerful radioactive isotope.

The dose would be enough to arrest further development of any Medfly eggs or larvae in the produce.

State officials are spraying suspected Medfly areas about once every three weeks through the winter and plan to hit any remaining pockets of the insect with concentrated spraying in the spring.

But Japanese buyers have refused to accept any fruit from California that has not been completely fumigated.