Although physicians more commonly turn to surgery to treat the early stages of prostate cancer, radiation therapy is an equally effective treatment, a panel told a conference at the National Institutes of Health yesterday.

In the past many physicians thought that surgery was always the better of the two treatments, said Dr. Vincent T. DeVita Jr., director of the National Cancer Institute. Now the two can be considered equally effective treatments.

Until recently, impotence was an almost certain side effect of the surgery to remove the prostate, while radiation therapy, in which a beam of high-energy X-rays kills cancerous cells in the gland, resulted in impotence less than 20 percent of the time.

A few years ago, surgeons at Johns Hopkins Hospital developed a surgical technique that preserved potency in about 70 percent of the 206 patients who had the newer procedure.

The prostate is a small gland, found only in males, that is in the pelvic region and surrounds the neck of the bladder.

DeVita said patients need to be told of alternatives instead of simply choosing the first therapy presented to them, which often is surgery.

The panel recommended that patients be told about both types of treatment, probability of cure, complications, risk of impotence and incontinence and the psychosocial consequences of either treatment.

DeVita said the panel's conclusion will help the cancer institute organize a nationwide study to determine which treatment is better in terms of survival for longer than 10 years and which treatment results in a better quality of life.

However, 50 to 80 percent of the time, prostate cancer is not detected until it has spread to distant parts of the body, making surgery useless. Radiation therapy and hormone treatments can sometimes stop or at least slow the disease, but cures are less likely. Traditional chemotherapy has not proved useful against prostate cancer.

Since diagnosis early in the disease makes a cure more likely, yearly prostate exams are recommended for men over age 50.

While essentially a disease of older men -- about 80 percent of the time it is found in men 65 or older -- prostate cancer is being found increasingly in men in their 40s and 50s, said several physicians at the conference.

About 96,000 new cases of prostate cancer will be diagnosed in 1987, causing an estimated 26,000 deaths. The rate of prostate cancer among blacks is about 50 percent higher than among whites. For reasons that are unclear, "the incidence of this cancer has been increasing since at least the early 1970s," the cancer institute reported last fall.

It is the second most common cancer among men. Dr. Mitchell C. Benson of Columbia-Presbyterian Medical Center in New York said it could become the leading cancer killer of men as the population ages and lung cancer deaths decline.