The Environmental Protection Agency, after studying highly publicized environmental problems in the Niagara Falls region, said much of the alarm was unfounded and based on a "lack of understanding."

But the study, released yesterday, also found that some of the waterways continue to be contaminated with toxic substances. In response to the findings, EPA Administrator Anne Gorsuch outlined a series of actions to speed clean-up activities in the area.

Over the past 10 years discoveries of toxins, PCBs and pesticides in Lake Ontario and the Niagara River, as well as the Love Canal hazardous waste dump, led to loud outcries from New Yorkers and Canadians.

The EPA study concluded that "much of the emotional response" was due "to a lack of understanding concerning the significance of the level detected." It said that "because a substance can be detected does not necessarily mean it is a hazard" and that air, water and solid waste contaminants in many places are well below regulatory limits.

However, the study found that, although the water quality meets the standards of the International Joint Commission, the Niagara River continues to be a major source of PCBs, pesticides, heavy metals and other chemicals discharged into Lake Erie.

In a letter to the New York regional office, Gorsuch said that despite the agency's relatively optimistic findings "there are several remaining matters of concern which must be addressed if we are to accelerate the improvements in environmental quality that have occurred over the past 10 years."

Gorsuch directed the regional office to:

Fund a $500,000 contract with the U.S. Geological Survey to help the state evaluate inactive hazardous waste sites and, where needed, design cleanup programs;

Move rapidly to settle litigation involving the Niagara Falls sewage treatment plant and four Hooker Chemical Co. hazardous waste sites;

Provide technical assistance to the state in revising water permits for chemical dischargers;

Evaluate active hazardous waste facilities not covered by state permits, and force them to meet federal standards;

Help New York monitor its groundwater pollution; and

Coordinate efforts among all regulatory agencies to revise water monitoring programs in eastern Lake Erie to improve their accuracy.

The EPA study, initiated in August, concentrated on the Buffalo and Niagara Falls area, although the western New York counties of Erie and Niagara, as well as part of Ontario, were also examined.

Most of the toxic pollutants were found to come from industrial manufacturing plants.

The study found that the level of mercury contamination in fish has dropped dramatically in recent years as a result of environmental controls, but that dangerously high levels of other toxic chemicals are present in bottom sediments throughout much of the area's waterways, contaminating adult sport fish in Lake Ontario and the Niagara River. It stressed, however, that public drinking water met U.S. and Canadian standards.