NO MORE difficult choice faces the city's social agencies than whether to remove neglected or abused children from their natural parents or to let the children stay and to try to help the parents gain the economic and emotional stability they need to care for them. In Washington, critics have long argued that the child welfare system puts too much emphasis on removing children from neglectful or abusive parents and, then, too little on trying to find them new permanent homes.

As a result, thousands of children have been separated from their brothers, sisters and other relatives, shuttled among foster homes and institutions, and sometimes lost in the system. Even children placed in reliable foster homes have been cast adrift when the foster parents become too elderly or otherwise unable to provide care.

The District's new foster care policy, described this week to the city council by Audrey Rowe, the commissioner of social services, aims at ensuring that the need to provide immediate protection for neglected children does not interfere with the ultimately desirable goal of placing them in a stable, permanent family setting. The new system, developed by a consortium of private child welfare agencies, relies on assigning caseworkers to deal with each child on a continuing basis. Removing the child from a threatening situation will still have first priority. But caseworkers will also work with parents or relatives to see if outside help -- counseling, drug or alcohol therapy, child care or homemaker services--can make it possible for the child to return home. When that's not realistic, as in cases of recurring physical or sexual abuse, workers will try to arrange permanent adoptions, often through private agencies.

The new policy will depend heavily on the availability and good judgment of caseworkers. Sadly, many of the families from which neglected children come are little more than shifting arrangements where exposure to drug addiction, alcoholism, violence and criminal activity is routine. Making stable family arrangements, or finding adoptive homes for severely damaged children, will tax even the most sensitive and well-funded agencies.

Should the new system meet its ambitious goals for permanent placement, there will still be a need for well-supervised and caring foster homes and institutions. Nonetheless, the new policy promises improvement over past practice, especially if, as Commissioner Rowe intends, it is carried out with open eyes and the constant remembrance that the lives and future well-being of children are at stake