The Supreme Court yesterday ruled that government officials have flexibility under the Freedom of Information Act to keep information secret when they believe its disclosure would invade personal privacy.

The court, ruling in a dispute between The Washington Post and the Department of State, said that information about a particular individual may be withheld to protect the person from "the injury and embarrassment that can result from the unnecessary disclosure of personal information."

The justices unanimously reversed a decision of the U.S. Circuit Court of Appeals for the District of Columbia that had confined the exemption to "intimate" and "highly personal" material about someone. The lower court too narrowly interpreted a privacy exemption in the act, said Justice William H. Rehnquist, writing for the court.

Rehnquist's ruling gives the government significantly more freedom than the appellate court had allowed because it permits withholding data on the basis of the possible impact of its release.

The case revolved around an interpretation of the Freedom of Information Act, a source of constant controversy and attack because some government officials and others say it requires too much disclosure of sensitive information.

Yesterday's case began in 1979 when The Post was researching a story on two prominent officials in Iran's revolutionary government, Ali Behzadnia and Ibrahim Yazdi. The Post asked the State Department for records indicating whether either man held a U.S. passport or was an American citizen.

The Post said that because ceremonies in which new citizens take their oath are public, the information on Behzadnia and Yazdi was already in the public domain. The government denied the request, however, saying the information could jeopardize the men's lives. The State Department invoked the privacy exemption to back up their denial.

The exemption, one of nine in the act allowing withholding of government information, covers "personnel and medical files and similar files the disclosure of which would constitute a clearly unwarranted invasion of personal privacy."

Yesterday's ruling turned on the definition of "similar files." The appeals court, siding with The Post, said it meant files containing the type of data found in personnel and medical files, information of a "highly personal or intimate" nature. If the data failed to fit that category, the lower court said, there was no need to consider the other language of the exemption: whether it would be a "clearly unwarranted" invasion of personal privacy.

Rehnquist disagreed. The phrase "similar files was to have a broad, rather than a narrow, meaning," he wrote in yesterday's ruling. " . . . We do not think that Congress meant to limit the exemption to a narrow class of files containing only a discrete kind of personal information. When disclosure of information which applies to a particular individual is sought from government records, courts must determine whether release of the information would constitute a clearly unwarranted invasion of that person's privacy."

The court returned the case to the appellate panel for that determination.

All nine justices agreed on the result. But Justice Sandra Day O'Connor issued a one-line statement indicating she did not necessarily agree with Rehnquist's reasons.

The Reporters Committee for Freedom of the Press issued a statement yesterday calling the decision "a major defeat" for the principles of the Freedom of Information Act.