A federal appeals court has handed environmentalists a significant victory over the Interior Department in a case involving the department's efforts to open more than a fourth of all federal lands to commercial development.

In a decision released Friday, the U.S. Court of Appeals for the District of Columbia declined to lift a preliminary injunction that halted the department's attempts to withdraw federal protection from millions of acres in the West and Alaska and open them to mining and other private development.

"This is a serious case with serious implications," the appeals court said. "The department has reordered the balance of public versus private interests with respect to 180 million acres of federal land."

The injunction was issued two years ago by U.S. District Court Judge John H. Pratt in a lawsuit filed by the National Wildlife Federation. The federation charged that the Interior Department, following a policy instituted by then-Secretary James G. Watt in 1981, had violated federal law by opening the land to development without following procedures in the 1976 Federal Land Policy and Management Act (FLPMA).

Some of the lands at issue were adjacent to national parks or involved recreational areas in federal forests, and the policy became a heated controversy in the early years of the Reagan administration.

Under federal law, the Interior Department's Bureau of Land Management (BLM) is permitted to reclassify lands protected under FLPMA to open them for development; it also may reclassify lands designated for mining and other development to protect wildlife or permit recreational use.

Environmentalists charged that Watt's policy amounted to a wholesale reclassification of lands for development and that the action was taken without required land-use plans or public participation.

By the time the federation filed suit in 1985, more than 20 million acres of land had been reclassified and BLM had granted thousands of mining claims or oil leases on the land.

The U.S. appeals court panel ruled, 2 to 1, to sustain Pratt's injunction. It unanimously rejected procedural arguments put forward by Interior Department lawyers in an effort to halt the suit.

BLM spokesman Tim Locke said the department has not decided whether to appeal. "We know we lost, but we haven't been provided with the order yet," he said. Other Interior officials said the department is likely to seek a hearing by the full appeals court. "This case has really handcuffed BLM," one said.

The reclassifications involved one-fourth of all federal lands and more than half of the public land BLM administers.