A type of insulated wiring used in the major control systems of almost all American commercial and military aircraft can cause serious electronic failures and burst into flame under certain conditions, according to U.S. Navy investigations.

The test results, including findings that flaws in the coated wiring could threaten a military aircraft's chances of surviving combat, have led the Navy to ban the material from most of its new airplanes and helicopters.

The insulated wiring, used in more than 80 percent of the Navy's aircraft, is believed to have been the cause of electrical malfunctions and fires that endangered aircraft and forced pilots to abort flights, according to Navy officials. In one case, the material is suspected of causing an early-warning aircraft to lose all power, the sources said. They said no losses of life or aircraft have been attributed to the wiring insulation.

One of the Navy's research reports stated that damaged wires observed in laboratory tests "appear very similar" to the description of damaged wires found in aircraft.

The Navy's most recent tests, which alarmed officials enough to prohibit use of the material in most new naval aircraft, found that the insulated wiring frequently burst into flames when hit by a projectile simulating a bullet or missile attack, according to Navy documents.

The research showed that other insulated wiring tested under the same conditions did not have the same problems.

In its tests, the Navy found that the insulation developed cracks exposing the wires to deterioration when subjected to certain conditions in high-moisture environments. One study concluded, "It has been observed in service frequently enough to become a major subject of concern for the safety and maintenance engineers of Naval aircraft centers."

The Navy's test results prompted the Federal Aviation Administration (FAA) to conduct its own tests because the insulating material, called Kapton, is used in virtually every large commercial aircraft in service.

The FAA as well as the Air Force and the Army say they have experienced no major problems with the material, but add that they carefully limit the conditions in which Kapton-coated wiring can be used. The chemical properties of the wiring make it sensitive to water, humidity and chafing, according to the Navy reports.

"You've got to be careful," said Anthony J. Broderick, the FAA's associate administrator for aviation standards. "You don't step on it. You don't put it in a vibration environment where it will get chafed. Military aircraft are so different in design from civil aircraft."

James Harris, a spokesman for Dupont Inc., which manufactures Kapton, said maintenance problems are a "complaint we heard consistently" from the Navy regarding the material, but said the company does not believe the material creates a safety hazard in aircraft. Harris said Kapton insulation has been in use for almost 20 years and has a reputation as one of the best wire insulators available.

In addition to aircraft, Kapton-insulated wiring is widely used in missile guidance and control systems, including the air-launched cruise missile (ALCM), Minuteman intercontinental ballistic missile and numerous National Aeronautics and Space Administration space and launch vehicles. Aviation officials said the problems detailed by the Navy have not been detected in other vehicles, including the nuclear missiles, because their construction protects the wires from many of the environmental conditions that foster deterioration of the material.

Despite the Navy's test results, Navy officials said the wiring will not be removed from most of the service's aircraft that now use the material because of the multimillion-dollar costs of rewiring the planes. A Navy spokeswoman said the wiring could be replaced in individual cases where major problems are detected, however.

The Navy began testing Kapton in 1978 because of major maintenance problems with the wiring caused by humidity and extreme weather conditions. Researchers found that the wiring's life span was curtailed severely by the rapid temperature changes from high-altitude cold air to the humid, tropical conditions of many naval bases and aircraft carriers, according to test records.

That research at the Naval Research Laboratory and several naval aviation centers led to additional tests simulating aircraft combat conditions. Investigators last year found that the Kapton-coated wiring, in many instances, burst into flame when hit with a projectile.

"Our view of the tests are that they are tempered by actual experience," DuPont's Harris said. "In Grenada and elsewhere, planes successfully completed missions, were repaired and returned to service. We aren't sure they {the tests} relate to the real world."

But, as a result of the accumulated data, the Navy beginning January 1986 prohibited its contractors from using Kapton-coated wiring in most of its aircraft programs. Even so, about 41 percent of the Navy's new inventory, including the A6 Intruder attack plane and the F14 Tomcat fighter, contains Kapton-insulated wiring.

The FAA has been conducting flame tests on the wiring for more than a year, according to Darrell Pederson, assistant manager of the FAA's aircraft certification division in Seattle. He said the tests have not yet been completed, but added, "Preliminary briefings led us to believe that there really isn't a problem that we have to take urgent action on, or any problem at all."