Former senator Edmund S. Muskie was named yesterday to head a Nestle-funded commission to police the company's marketing practices in selling infant formula in Third World nations.

Nestle's new seven-member commission, consisting chiefly of doctors and ministers, will investigate any alleged violation of the World Health Organization's (WHO) code on marketing infant formula in countries that have not adopted a code of their own.

Muskie said that, although Nestle is funding the commission and paying him at his usual lawyer's rate per hour to chair it, he takes the responsibility seriously and will have complete freedom to investigate Nestle practices and announce the results.

The commission will have "the authority to say anything we want to say in as harsh a language as we want to say it," Muskie, a former Maine Democratic legislator, said. "We have a commitment from Nestle that satisfies us."

Nestle products are the target of a boycott by some 75 churches, unions and health organizations which claim the marketing practices of Nestle and other companies have caused many mothers to switch from breast to bottle feeding, despite the cost and possible danger to infant health.

Last year the United Nations' WHO adopted a voluntary code for nations to use in restricting promotion of infant formula, and assuring that mothers are aware of the acknowledged superiority of breast feeding over formula feeding for most infants.

Avery D. Post, president of the 1.8 million-member United Church of Christ, was asked to serve on Nestle's commission but refused, saying Nestle's interpretation of the WHO code and the code itself "differ in some critical ways."

Post said several practices still permitted in the Nestle instructions are contrary to "the goals of the code." They include giving out free samples of infant formula and the use of company-paid "mothercraft nurses" to give advice on infant care and feeding.