John W. Hernandez Jr., acting director of the Environmental Protection Agency, allowed Dow Chemical Co. to suggest changes in a 1981 draft EPA report that largely blamed Dow for dioxin contamination in two rivers in Michigan, according to EPA documents.

After receiving Dow's comments, EPA officials deleted statements linking dioxin to cancer and birth defects, as well as the agency's conclusion that "Dow's discharge represented the major source, if not the only source, of dioxin contamination" in two rivers near Dow's plant in Midland, Mich.

The 1981 study was made as Michigan citizen groups were urging the EPA to restrict the levels of dioxin in the area's water, soil and air.

The EPA has taken no action in Michigan to regulate dioxin, a poisonous chemical produced in the manufacture of herbicides, although the agency last month offered to buy the homes of 2,400 residents in the dioxin-contaminated town of Times Beach, Mo.

Rep. James H. Scheuer (D-N.Y.), chairman of a Science and Technology subcommittee, said yesterday that Hernandez "personally intervened at EPA to allow Dow . . . to alter a draft report and suppress all references to Dow's responsibility for dangerous levels of dioxin contamination in and around its plant."

Scheuer, who released the dioxin study, said it shows that negative information on a toxic substance "can be suppressed at the behest of the very company doing the polluting."

Hernandez, who was the EPA's second-ranking official at the time of the study, strongly denied yesterday that he ordered the deletions in the final dioxin report, saying he directed only that it be shared with Dow at the company's request.

Hernandez said he acted because the report contained some of Dow's own research and "had not been through a thorough peer review by outside scientists." He said "it might have been better" to circulate the report more widely, but said it "was not part of a rule-making effort or an enforcement action." A Scheuer aide said it was highly unusual for a draft report to be sent to an outside company before it is completed by agency scientists.

Lisa Swank, a spokesman for Dow, said that EPA "asked us for our comments" as part of a routine peer review process. She said other companies also may be contributing dioxin to Michigan's Saginaw and Tittabawassee rivers, and that the amount of dioxin in the latter river is only 200 parts per trillion. This, however, is four times the Food and Drug Administration's allowable standard for dioxin levels in fish.

The study involves the most toxic form of dioxin, 2,3,7,8-TCDD, and a related compound, PCDF. The handwritten notes of Dr. J. Milton Clark, an EPA scientist in Chicago, highlighted the deletions that Dow officials requested and received.

The draft report cited animal studies showing that dioxin causes liver damage in rats, cancer in animals which have received low dosages, reduced fertility in monkeys and birth defects in rats, mice and hamsters. All these references were deleted from the final report.

The final report also deleted references to accidental human exposure that caused ailments ranging from fatigue to insomnia. Also excised was a recommendation that fish consumption from the two Michigan rivers be prohibited, but an EPA spokesman said officials in Washington decided this was a FDA matter.

Clark's notes said Dow also sought to exclude references to Agent Orange, a herbicide used in Vietnam that contains dioxin. Dow asked that EPA's comments about a risk of reduced fertility be deleted, Clark wrote, saying: "Dow concluded that no risk existed--want us to include different position. Critical of EPA's conclusions."

Val Adamkus, the EPA's regional administrator in Chicago, who was told by Hernandez to share the draft report with Dow, said through a spokesman that he considered Hernandez' order highly improper.

Dow officials say that dioxin does not present a threat to human health.

EPA Inspector General Charles L. Dempsey has launched an investigation into Hernandez' role in the dioxin report.