Its manufacturer touted it as a "one-shot, labor-free" pesticide with "no side effects," and farmers from Idaho to Maine eagerly embraced it as a convenient answer to the age-old and messy problem of flies in the chicken house.

But Larvadex, a pesticide widely used for nearly two years to combat flies on poultry farms, was abruptly pulled off the market last month by the Environmental Protection Agency after officials discovered--by accident--that the chemical leaves a cancer-causing residue in eggs and chicken meat.

The action set off howls of anguish from egg producers, drew squawks of outrage from Ciba-Geigy Corp. and has raised nagging new questions about how and why chemicals are introduced into agriculture.

Larvadex, which never has been registered by the EPA for any use, is a so-called "feed-through" chemical. It is fed directly to the chicken, passes through the bird and kills fly larvae that hatch in chicken manure.

Ciba-Geigy, sole producer of Larvadex, pushed it as a "whole new concept" that "goes to the source of the problem."

"You won't believe Larvadex until you try it," the ads crowed. University researchers marveled at its 99 percent rate of effectiveness, and poultry farmers clamored to get their hands on it.

In less than 20 months, despite state health authorities' contentions that the pesticide had been tested inadequately and was aimed at solving a fly crisis that did not exist, the EPA approved "emergency" permits allowing virtually unlimited use of the pesticide on laying hens in 28 states.

In recent months the agency allowed some states to expand use to broiler chickens, and in other states Larvadex has been readily available under "experimental use" permits.

All the permits were hastily revoked Aug. 12, several days after a California health official called the EPA's attention to a recent study by the Health and Human Service Department's National Toxicology Program, showing that melamine--which is created in the chicken as a "metabolite" of Larvadex--caused cancer in male rats.

The dose level given the laboratory rats was 4,500 parts per million--more than 10,000 times the amount found in the eggs and tissue of chickens fed Larvadex. It was enough, however, to cause the EPA to decide, millions of eggs and thousands of gallons of chicken soup after it approved Larvadex, that the pesticide posed "an unnecessary source of a carcinogen."

At the time the emergency permits were approved, "we didn't have any concern," said Edwin R. Johnson, director of the EPA's office of pesticide programs. "We had studies showing low levels of residue, but the parent compound didn't produce an indication of chronic effects on the chicken. We also didn't think it would cause anybody else cancer."

Ciba-Geigy says there is still no reason to worry. The chemical and drug company, which envisions a multimillion-dollar annual market in Larvadex for both poultry and swine, called the EPA's action "inappropriate and premature." Its own studies, it said, show the pesticide perfectly safe.

"They made this decision without finishing a risk assessment," said Skip Ragland, a Ciba-Geigy spokesman in Greensboro, N.C. "We've completed ours. And we've notified EPA that the chances of man developing a tumor as a result of eating eggs from layers consuming Larvadex feed is less than 1 in 10 billion."

But Ciba-Geigy also did the earlier studies that the EPA used as the basis for its "emergency" approval of Larvadex, and some authorities have found those studies unsatisfactory.

In California, which declined to seek an emergency permit but is considering permanent registration of Larvadex, a state public health official warned in a recent memorandum that the Ciba-Geigy studies failed to show a safe level for fetotoxic or embryotoxic effects. In other words, the company could not tell at what level the chemical would be safe for fetuses.

"We think that this would be of particular concern to pregnant women if the registration is approved," wrote Dr. Richard J. Jackson of the California Department of Health Services.

Ciba-Geigy apparently is aware of the problem. Its advertising brochures caution farmers not to feed Larvadex to chickens producing eggs for hatching purposes.

Jackson conceded that Ciba-Geigy's studies with laboratory mice did not find a "statistically significant" increased incidence of cancer, but he said a larger study might have shown different results.

"These borderline findings would not be so worrisome if Larvadex were not going to be a residue in a major dietary staple," he wrote.

Earlier this year, the chief toxicologist in California's Agriculture Department found the situation reminiscent of the uproar over the hormone diethylstilbestrol (DES), a feed additive widely used to stimulate weight gain in beef cattle until it was discovered that DES was being passed on to consumers in meat.

The toxicologist, Keith T. Maddy, argued strongly against requesting an emergency permit for Larvadex, both because of his reservations about the intended use and because he didn't see that an emergency existed.

"The control of fly populations around chicken houses is not a new problem and has existed for hundreds of years," Maddy wrote in a memo to the head of the pesticide registration unit. "Adequate fly control can be achieved with proper use of currently available methods although they may not be as cost-effective or convenient to apply."

Emergency permits are supposed to be reserved for dire situations in which farmers are threatened with ruin from crop or livestock pests for which no alternative remedy is available. Experimental permits, too, supposedly are subject to strict limitations.

But EPA critics long have contended that these clauses are huge loopholes that allow untested and perhaps dangerous chemicals onto the market. Ciba-Geigy advertised Larvadex as available for sale under an emergency- or experimental-use label.

State agriculture and industry officials in several states concede that the convenience of Larvadex was a major selling point. It is easier and, after subtracting labor costs, cheaper to use than the standard methods of scrupulous sanitation and periodic spraying for flies.

"The fly problem is not an ongoing thing," said Paul Levingston of the California agriculture department. "But there are poultry interests who would like to have it as an additional tool."

In the past, the tool of choice was a shovel, vigorously applied to the chicken manure as it accumulated.

"The old method was you got in there and scooped it up, put it in a wagon and spread it on the fields," said Elvis Cozart, a Texas Department of Agriculture official. "You don't find labor enthusiastic anymore about scooping manure."

Some state officials contend, however, that the standard methods of fly control are inadequate to deal with a relatively new and frustrating problem for poultry farmers: suburbia.

As housing developments spring up in once-rural areas, the flies that used to be an ordinary fact of life around chicken houses have become a nuisance to patio-sitters, a worry to public health officials and a subject of litigation.

"There are some people who move to a farming area and forget why they moved to the country," said Aaron Spandorf, a county extension agent in New London County, Conn. "Neighbors of poultry producers have been demanding--to put it mildly--that farmers be less of a source of flies."

Ciba-Geigy says that's why it developed Larvadex in the first place. According to company spokesman Ragland, Connecticut was so eager to get Larvadex that it ordered farmers to use the product.

"Indirectly, you might reach that conclusion," said Spandorf. "We never found anything that worked previously."

But he said he made his decision solely on the basis of what the EPA and Ciba-Geigy told him. "I'm not in a position to assess that type of risk," he said. "My understanding was to go by what others had approved and agreed upon . . . . It's not my place to argue what's right or wrong."

The EPA's Johnson said the agency depended heavily on the states. "They convinced us that in certain situations alternatives were not available," he said.

Johnson conceded, however, that there was a "philosophical issue of whether you should have residue in chicken . . . . We'll have to do a much more thorough risk-benefit analysis."