U.S. District Judge Harold H. Greene, who oversees much of the nation's phone business, yesterday issued a landmark opinion that angered executives at regional telephone companies even as it allowed them to offer new, high-technology services to phone users around the country.

The ruling upheld restrictions barring the seven regional phone companies, including Bell Atlantic, which serves the Washington area, from providing long distance services or manufacturing phone equipment. But it may allow the firms to introduce electronic answering machines and video terminals to their residential and business customers as soon as next year.

Greene also prohibited the regional phone companies from creating and selling their own information services, such as electronic yellow pages, restricting the firms to transmission functions only. Executives at the seven regional companies said the restriction will likely slow the introduction of the new technologies. {Details on page D1.}

"We are appalled by the judge's order," said Ken Millard, senior vice president of Ameritech Corp., the Midwest regional phone company. "It is clearly out of touch with the marketplace and essentially puts customers across the country on hold in a whole new era of telephone service."

Executives at Bell Atlantic said they would appeal Greene's decision on information services. "We think a real injustice has been done," said Raymond Smith, the company's vice chairman. "The judge says we can be a publisher, we can publish information, but we cannot publish any of our own material, our own articles. We think that is basically wrong and flawed and we will appeal."

A successful appeal of yesterday's ruling will be difficult, however, because the Supreme Court previously has reviewed the most important legal issues addressed by Greene.

Consumer groups, long distance companies, telephone equipment manufacturers, and newspaper publishers praised Greene's decision, saying it would promote stability in the rapidly changing phone industry, lead to the introduction of new services to phone users and prevent anticompetitive abuses.

Some of the praise, however, was more parochial. American Telephone & Telegraph Co. and MCI Communications Corp. were relieved that the regional firms will not be allowed to compete against them in the lucrative long distance business.

The Justice Department and the seven regional phone companies created by the breakup of AT&T in 1984 had urged Greene to lift virtually all the restrictions on the regionals, especially those that keep the firms out of long distance, equipment manufacturing, and other businesses. If Greene had followed that course, he would have drastically altered the phone business, causing sweeping changes in its basic structure.

In a 223-page opinion released yesterday, however, Greene wrote that it was far too early to consider such fundamental changes. Allowing the seven regional companies into long distance and phone manufacturing, the judge ruled, would stifle competition and lead to many antitrust lawsuits.

"If anything, the need for the line of business restrictions is greater today than it was before the Bell System breakup," Greene wrote.

(Judge Greene supervises the regional companies because he oversees the consent decree entered into by AT&T and the Justice Department at the time of the breakup. Justice sued AT&T on antitrust grounds in 1974 and the case was settled in 1982.)

John L. Clendenin, chief executive of the regional BellSouth Corp., said in a statement that the "limited role" granted to the regionals by Greene "will do little to facilitate the development of the information-services industry in this country."

The judge's decision to permit the regional companies to provide electronic information services is not final or fully developed. For example, it was unclear from Greene's opinion where the distinction between publishing original information and transmitting information provided by others lies, lawyers and telephone executives said.

Companies and interest groups were invited by the judge to submit proposed rules during the next 20 days. Those rules, once approved by the judge, will define content and transmission and will govern the information-services business in the future.

The judge made clear in his opinion that he hopes the regional companies will provide customers with information services similar to those presently available in France, Britain and Japan. Phone users in those countries have access to electronic directories, banking and other services through video terminals connected to their telephones.

Telephone experts were uncertain yesterday, however, whether the regional companies would be permitted to provide so-called in-network information services, such as electronic answering machines that are activated by touch tone telephones -- similar to services such as call forwarding and call waiting that are now available in many areas of the country.

Greene's decision came as no surprise to many of the lawyers and executives involved in the proceeding. The judge had not been expected to allow the regional companies into long distance and manufacturing. At hearings on the issue two months ago, Greene sharply criticized the Justice Department for reversing its antitrust policies and supporting the regional companies' position.

The judge repeated his criticism of Justice in yesterday's opinion, writing at one point that the department's legal analysis "is riddled with serious flaws" and at another that its policy reversal "is truly ironic" since it had taken the opposite position on competition in Greene's courtroom while the AT&T lawsuit was tried.

The rationale for the restrictions on the regional companies preserved yesterday by Greene stems from the so-called bottleneck theory of antitrust law. Adherents to the theory argue that if the local phone companies are permitted into competitive businesses like long distance, they improperly will use profits from their local monopolies to subsidize their entry into competitive areas.

Justice and the regional companies generally argued that whatever telephone bottleneck existed prior to AT&T's breakup has been dissolved in the last few years by increased competition in all sectors of the telecommunications industry. Greene rejected that argument, citing studies by the Justice Department's own economists that warned against lifting restrictions on the regionals too soon.

Greene himself has been accused by critics of lording it over the telephone industry, a charge he has denied. Yesterday's opinion, however, ensures that the judge will play a central role in telephone policymaking for the rest of the decade and beyond.

"It appears that the court is intent on ensuring that it, rather than the desires of consumers, will be the key force in determining whether and how new and innovative services will be provided to the American consumer," said FCC chairman Dennis Patrick. The FCC is developing its own procedures under which the regionals would be allowed to introduce information services to their customers.

One decision made by Greene yesterday, however, will reduce the judge's day-to-day role in the phone industry. Greene abolished a procedure under which the regional companies had been required to seek his permission in order to enter businesses outside the communications industry, such as real estate and financial services. The regionals are now free to enter those businesses without any restrictions.