The Reagan administration's controversial decision not to appeal a crucial court ruling on a sex discrimination case has brought to the surface, in unusual detail, a sharp disgreement among government officials and lawyers over the government's civil rights obligations.

The furor stems from a decision last month by William Bradford Reynolds, head of the Justice Department's Civil Rights Division, not to appeal a U.S. district court ruling that Title IX of the 1972 Education Act amendments -- which prohibits sex discrimination in federally funded education programs -- does not apply to athletics at the University of Richmond because the sports programs there do not directly receive federal funds.

Until the Reagan administration took office, the government took a broad view of Title IX, saying it applied to almost all school programs if the school received any federal funding. As a result, colleges moved to put women's athletic programs on a more equal footing with men.

The ruling in the Richmond case -- and the decision not to appeal it -- have come under attack by civil rights and women's organizations, who say it will sharply limit the government's ability to enforce laws against sex discrimination, and possibly other forms of discrimination, at schools receiving federal funds.

Clarence M. Pendleton Jr., recently appointed by Reagan to head the U.S. Civil Rights Commission, accused Reynolds in a letter late last month of making a "profound break" with the civil rights policies of past administrations which "if pursued, will reduce civil rights protections in education significantly."

If the Richmond decision were applied nationwide, Pendleton said in his Sept. 30 letter, "It could leave as little as 4 percent of this year's authorized Department of Education higher education funds still tied to Title IX obligations."

Pendleton also charged that Reynolds' interpretation could be extended to similar laws banning discrimination on the basis of race or handicap at schools receiving federal funds.

But even before the Reynolds decision, lawyers at Justice and Education argued Pendleton's points in language as strong or stronger.

Memos obtained by The Washington Post indicate that lawyers in the Civil Rights Division and in Education's Office of Civil Rights argued at length in favor of appealing the ruling.

Resistance to the appeal came from Reynolds and Daniel Oliver, general counsel at Education.

On Aug. 19, Harry M. Singleton, head of the civil rights office at Education, sent an internal memo to Secretary Terrel H. Bell, saying that because of internal arguing between Oliver and lawyers at the Justice Department, major issues in the case were avoided in the government briefs to the court.

"The result was a vacuum which the court filled with an erroneous view of the government's position," Singleton wrote. "The government's briefs were, in my view, compromised by internal bickering with Oliver on the legal and policy issues raised by the case."

He warned Bell that the court opinion is "sweeping and profound" and could seriously hamper investigations by the Office of Civil Rights by requiring proof of discrimination before the office can begin an investigation. The office enforces anti-discrimination laws in education programs receiving federal money.

Brian Landsberg and Stewart B. Oneglia, heads of two sections within the civil rights division at Justice, had sent a memo to Reynolds Aug. 5 urging an appeal and saying the court finding "profoundly restricts the authority of Education and other federal agencies to investigate discrimination complaints."

Reynolds, however, said last week the decision not to appeal was based on a proper interpretation of the law, and he said it was not a change in department policy.

In a letter to Pendleton justifying the decision not to appeal, Reynolds said the Justice Department found U.S. District Court Judge D. Dortch Warriner's opinion "to be both analytically and legally sound. . . . This 'no appeal' decision suggests no retrenchment of our enforcement responsibilities under Title IX--as some in the political arena have been quick to assert."

Oliver did not respond to requests for an interview.

Warriner also ruled that funds received by the university from federal student loans and grants should not count as federal aid. That conclusion runs directly counter to a ruling earlier this year by the 3rd U.S. Circuit Court of Appeals that Title IX protections apply even if the only federal aid a school receives is student grants and loans.

Justice Department lawyers who have dealt with Education say the Richmond case is one of a number of disputes between Oliver and his department's Office of Civil Rights over enforcement of civil rights regulations in education. They say that generally Oliver wins, but in some cases the Justice Department has been forced to overrule his attempts to change regulations, because they believe his position cannot be supported in court.

For example, Oliver began working at least a year ago to change the definition of "federal assistance" in federal regulations, with an eye toward exempting from Title IX requirements those schools whose only federal aid is from student loans and grants.

A memo last December from Oliver to Bell indicates that Reynolds rejected Oliver's arguments, saying he did not have "a good chance of winning on this issue in court." Oliver urged Bell to move forward anyway, claiming that even if the department did lose in court, it would win the "political point." Sources familiar with that issue say Oliver was finally vetoed by the White House.