The owner of a crippled Baltimore savings and loan that may be sold to Chase Manhattan Corp. stands to gain millions of dollars more on a project he would retain after the sale than aides to Gov. Harry Hughes have previously said, according to a letter written by an attorney for the state agency that controls the thrift.

The potential profit for Merritt Commercial Savings and Loan owner Gerald S. Klein shocked one key legislator who has already expressed doubts about the wisdom of the sale, which he and his colleagues must approve.

Hughes has said the General Assembly's approval of the Merritt sale is a crucial component of his plan to solve Maryland's five-month-old thrift industry crisis.

That plan suffered a severe setback Thursday with the announcement that the planned sale of another troubled thrift in Silver Spring to a Citicorp subsidiary had fallen through.

State Sen. Thomas P. O'Reilly (D-Prince George's), who saw the written analysis of the Klein-controlled real estate project, said, "If Chase knew of this and the administration knew of this and came before the General Assembly and failed to disclose it, that's a lie."

"There's a shell game going on," added O'Reilly, the vice chairman of the Senate Finance Committee, which will consider the legislation.

The 280-acre Chesterfield housing development in northeastern Anne Arundel County, which Klein has controlled for several years, could generate a $9.9 million "gross recovery" by 1989, according to the letter written by an attorney for the Maryland Deposit Insurance Fund (MDIF), the state agency that controls Klein's savings association.

The nearly $10 million estimate is far higher than the value placed on the 1,846-home project by Chase and officials of the Hughes administration during testimony this week when the General Assembly was asked to approve the Merritt sale.

In the legislative hearings this week, Chase officials and Hughes aides said repeatedly that the Cheserfield project and three other ventures Klein will keep are essentially worthless or carry substantial debts. Many legislators insisted that Klein should gain nothing after the sale of Merritt because they feel he is responsible for problems at the thrift, where deposits are frozen.

A Chase vice president yesterday reaffirmed the bank's position, disagreeing with the methods used by the MDIF attorney in calculating the project's potential value.

A two-page letter prepared in August by Donald C. Allen, a Baltimore lawyer who represents MDIF, said the sale of all Chesterfield homes should produce a $17.8 million income, which would be offset by $7.9 million in construction costs and debt service on outstanding loans on the property.

"I am not able to tell you the extent of what is technically profit," Allen said in the letter intended to estimate the project's "realizable value." The letter was sent to lawyers for Baltimore developer Morris Wolf, a former partner of Klein's in the project who is now embroiled in a contractual and legal battle with the Merritt owner.

Allen noted in the report that the difference between sales income and future costs would leave a "projected gross recovery" of $9.8 million.

Key legislators said questions about Chesterfield could slow up or even derail an agreement that Chase has said must be approved shortly if it is to succeed at all.

Senate President Melvin A. Steinberg (D-Baltimore County) said yesterday that "Chesterfield is an area of concern to many of us. The question is what is the extent of profitability. It could be very embarrassing if in a short period of time there is a profit in the millions."

Steinberg, who met privately with Hughes and Chase officials on Thursday, said he is studying ways to fashion a "contingency agreement" that would protect the state against any potential windfalls to Klein. Maryland would pay Chase $25 million out of an industry insurance fund as part of the deal proposed by the giant New York bank and the Hughes administration.

A vice president for Chase who explained the Chesterfield project to legislators during hearings this week said in a telephone interview yesterday that Chase disagrees with "the approach" used by Allen in his valuation, and repeated the bank's assertion that the project is at best a "break even" proposition.

Richard R. Byrne, a vice president in Chase's real estate finance division, said that Allen's estimate of a $9.9 million recovery does not take into account projected developers' costs that Chase estimates at 15 percent. Nor does it include the cost of repaying $4.8 million worth of loans on the property, he said.

When those projected costs are deducted, argued Byrne, Klein would emerge with just enough to pay off the loans on the project, which include $1.7 million owed to Merritt.

"These assumptions can be either conservative or optimistic depending on what happens to the market," added Byrne. "If the market stays healthy and interest rates go down to 9 percent and everyone is dying to move there, maybe he Klein sells out and makes a profit. But I am a conservative banker. That's where you get the difference in values."

Dale A. Cooter, the attorney for Klein's former partner who requested the letter on Chesterfield, yesterday described the project as "one of damn few good deals in that S&L. Everyone associated with this venture said it was a good one."

Cooter accused Chase of "playing a shell game with the money. The net effect to Klein is a $10 million gift. There's a $10 million error in Chase's math. To the extent that people said this was a dog property, that's a misrepresentation."