Western sheepherders won a round yesterday in a long administrative battle when the Environmental Protection Agency approved renewed use of Compound 1080, a poisonous powder, against coyotes and other sheep predators.

The EPA said ranchers grazing sheep and goats on federal land may use 1080 -- formally sodium fluoroacetate -- in a "livestock protection collar." Coyotes normally attack their prey around the throat, and the poison-filled pouch on the collar is intended to destroy any predator that bites into it.

By approving the compound's use exclusively in collars, the agency hopes that only predators will be exposed to the poison.

Compound 1080 was banned on federal range land by President Richard M. Nixon in 1972 after conservation groups argued that exposure to the poison was killing many nonpredators, including the bald eagle and other endangered species. The Nixon administration said other methods of predator control, including trapping and shooting, could reduce ranchers' livestock losses.

But sheepherders on the western plains, battered by competition from synthetic fabrics and imported mutton, say the poison is the only effective means to stop the coyote, a tough, wily animal about the size of a German shepherd dog.

Nearly all sheep ranchers use 1080 and other poisons on their private land, where it is legal. In the West, however, many sheep graze on federal land, and ranchers say their losses to predators there have been unacceptably high since the poison was banned.

The EPA decision yesterday was criticized by conservationists, including Dan Smith of the Washington-based Defenders of Wildlife. "It's ridiculous," Smith said. "There are so many other ways to control coyotes that don't kill off the endangered birds and prairie animals with them."

On the other hand, sheep ranchers have complained that the EPA's decision to limit use of 1080 to the protective collar is a poor compromise. Among other problems, the collar means that at least one sheep will be lost -- a literal sacrificial lamb -- for every coyote killed.

The ranchers want the right to scatter small hunks of meat or tallow laced with 1080 around the range to kill coyotes. The agency said yesterday that it is studying the use of such "single lethal dose" baits but cannot approve them because there is insufficient data on their impact on nonpredators.

The ranchers' partial victory yesterday, after four years of hearings and rule-making, may not be final. A legal challenge to the EPA's decision-making process in the Compound 1080 case is pending in the federal Circuit Court of Appeals in Denver.

Yesterday's decision included numerous conditions and limitations on the use of Compound 1080. Among other things, the EPA said any range area where 1080 is used must be posted with warnings in English and Spanish -- a recognition that many western ranchers employ illegal Central American aliens to herd their flocks.