Interior Secretary James G. Watt's new wilderness proposal would allow the administration to open up for development millions of acres of federally owned land currently being studied as potential wilderness areas.

Control over the future of those lands would be taken from Congress and shared with the executive branch, where Watt already has indicated he favors making them available for private development.

A draft of Watt's proposed legislation surfaced yesterday and was promptly denounced by conservation groups as another effort by the Interior Department to turn over potential wilderness areas for private exploitation.

The main part of the legislation embodies Watt's surprise announcement Sunday that he would move to ban drilling and mining in wilderness areas--a goal enthusiastically supported by many in Congress and by conservation groups.

But one section not previously discussed publicly proposes that the president be allowed to release from wilderness restrictions millions of acres of western lands managed by the Bureau of Land Management that are now being studied as potential wilderness areas and that currently are protected from private drilling, mining, timber-cutting and other profitable uses.

There are 24 million acres of BLM-owned land under study as potential wilderness areas, according to that agency. A representative of the Sierra Club, Tim Mahoney, charged that the legislation carries out Watt's stated goal of stripping those lands of wilderness protection and opening them to private development.

Current law requires the acreage to remain in its more or less pristine state until Congress determines otherwise. The proposed legislation would allow the president to release the land from wilderness study status. If released, it would be open to certain kinds of development.

Before more of the details of the legislation became known yesterday, Watt won cautious approval from several usually hostile congressmen for his promise to introduce a ban on drilling and mining on existing wilderness lands.

That represented a policy reversal on Watt's part. At one point, he had favored extending the time period for mineral leasing on those lands past the Dec. 31, 1983, deadline imposed by Congress in the Wilderness Act.

Opposition to wilderness leasing had come from several prominent western Republicans who were under constituent pressure to keep those areas in their states free of mineral development. Republican members of the Wyoming delegation yesterday endorsed Watt's change of mind.

The chairman of the House Interior Committee, Rep. Morris K. Udall (D-Ariz.), normally a critic of Watt, told the secretary yesterday he was "pleased and happy to see this apparent change in policy . . . . It looks like we can head off a nasty fall . . . . I hope the administration will repent the error of its ways."

However, Udall and other Democrats said they would withhold their full endorsement until they had read the exact language of Watt's legislation. "I want to read the fine print," said Rep. Phillip Burton (D-Calif.), who earlier had introduced legislation to ban mineral leasing in the wilderness areas.