The general counsel for an Indiana chemical company worked at the Environmental Protection Agency as a part-time consultant last year while the EPA was suing his firm for allegedly creating one of the nation's most hazardous waste sites.

Robert Polack, lawyer for Reilly Tar and Chemical Co. of Indianapolis, said yesterday that there was nothing improper about his work at EPA because he kept "an absolute impermeable stone wall" between himself and officials involved in the toxic waste program.

"I have been obviously reading with interest and concern what's going on at EPA," Polack said in a telephone interview, "but I feel as if my brief tenure there was directed solely to management assistance on a very narrow spectrum."

Polack worked as a consultant to ousted assistant administrator John P. Horton from July, 1981, until July, 1982, according to agency records. Horton, who was in charge of EPA administration until he left the agency last week as part of a major management shakeup, said yesterday that he knew before hiring Polack of his relationship with the Reilly firm and saw no problems since Polack's work was unrelated to the Reilly suit.

The agency's ethics officer said the relationship posed no conflict of interest, and officials circulated a memo in the hazardous-waste office instructing employes to "exercise care not to inadvertently disclose confidential information to Mr. Polack."

However, hazardous-waste officials said they had serious concerns about Polack's presence at the agency and repeatedly asked the general counsel's office to examine possible conflicts.

The concerns peaked last spring, they said, when Reilly Tar asked for a meeting with EPA lawyers to discuss an out-of-court settlement of the agency's lawsuit, which charges that the company contaminated drinking water supplies in St. Louis Park, Minn., with cancer-causing chemical wastes from a coal tar distillation plant.

"We saw there was a potential for a conflict of interest and we promptly asked our legal office for a determination," said Mike Kozakowski of the enforcement section of the hazardous waste program.

By the time the session was held, on Aug. 24, 1982, Polack was no longer on the EPA payroll. An agency spokesman said that his contract officially ended on July 26, and that he was then free to represent his company in negotiations with the agency.

But the close timing apparently caused some discomfort in the government. "People went into that meeting and suddenly there's this guy from Horton's office sitting there with Reilly Tar. Sure it makes you uncomfortable," an official said.

The suit calls on Reilly Tar to pay to clean up the contamination, a project that agency officials said could cost more than $100 million. Several drinking-water wells have been forced to shut down because of the poisoning, according to agency documents. Minnesota officials have ranked it as the state's most hazardous waste site.

Polack said his assignment at the EPA was to propose improvements in the contracting system run by Horton, who was in charge of general administration. He said he did not seek the job, but was contacted by agency officials "as a person who'd worked in a prior Republican administration." Polack ran a contracts program in the Department of Defense during the Nixon administration.