Advanced Genetics Sciences company, which admitted violating federal regulations in carrying out safety tests of a genetically engineered microbe, has agreed to start from scratch and do the tests properly, according to court papers.

Jeremy Rifkin, head of the group that has sued to have the company's experiments halted, said yesteday, "We consider this an important victory in our three-year litigation on this experiment. The fact that the company must start over is a clear message to the biotechnology industry they they can't wantonly violate appropriate environmental safeguards."

The company, according to an Environmental Protection Agency letter released in U.S. District Court here, agreed to redo "pathogenicity tests" -- tests to determine whether the engineered microbe is a pathogen that can damage other plants. Completed tests are to be reviewed by the EPA by May 28.

The company violated federal regulations by performing some safety tests of the gene-engineered microbe on trees in the open air, long before such open-air testing was approved by the EPA.

The EPA is expected to announce Monday the company's punishment for the violation. The actions could include a formal reprimand, fines or revocation of the company's permit to do the experiment. EPA officials have said they are sympathetic to the company's work, and believe the novel microbe is harmless, but cannot let the company's violations go unpunished.

The company is trying to develop a live, gene-engineered microbe called Frostban that would be sprayed on plants to block frost formation. Such a product, if it works, could prevent hundreds of millions of dollars in crop damage.

The field experiments for Frostban would have been the first use of live genetically engineered microbes outside the lab.

Critics, including political activists and scientists, have said the microbe could cause damage to other plants or to weather patterns. But the company maintains that the microbe is similar to one common in nature, and is harmless.

So far, the experiment has encountered one problem after another. Federal agencies have requested much additional data on the safety of the microbe, and politicians and residents near the site of the proposed experiment have protested. The Washington Post then reported that the company had done safety tests in apparent violation of EPA regulations, and EPA began an investigation.

To satisfy EPA requirements, the company had injected its microbe into fruit trees to see if it might multiply and cause damage to such commercialy important trees as almond, cherry, apple, peach, pear and plum. If the microbe appeared safe, it would then be "released into the environment" in field tests, according to the EPA plan.

The company told EPA that the tree experiments would be done in a "containment facility" -- a greenhouse -- but the company actually tested the trees in the open air on its Oakland, Calif., rooftop, according to company and EPA sources.

The EPA said the open-air tree tests amounted to releasing the microbe into the environment. The open-air tests were to decide whether the microbe was safe enough to release into the environment. Instead, the experiments themselves became the first release.

In addition, the safety tests were seriously flawed, EPA officials said. The trees were tested at temperatures that varied greatly last February through June, but were generally at far warmer than the temperatures the company told the EPA it would use. Company notes on the first tests also showed a number of possible cankers and other damage at the sites where the microbe was injected, suggesting it was possible the microbe might harm some trees.

The company has dismissed the idea, saying the tree damage must have come from some other factor.