Waste Management Inc., which has long touted ocean incineration as one of the most promising technologies for disposal of hazardous industrial refuse, has given up efforts to obtain permits to operate its incinerator vessels in U.S. waters, company officials said yesterday.

William Y. Brown, Waste Management's director of government affairs, said the company is abandoning its six-year campaign for permits because of what it calls the Environmental Protection Agency's tortuous regulatory process and the potential competition from older, land-based boilers -- cheaper to operate than ocean vessels -- that would be allowed to burn hazardous waste under a May proposal by the agency.

"The same kind of waste we'd propose to incinerate 100 miles out at sea will now be burned, if that proposal goes forward, in hospital boilers 100 feet from the neonatal unit and around the corner from the emphysema ward," Brown said.

EPA spokesman Dave Cohen called the hospital comparison "patently untrue and apparently self-serving," contending that the proposal's standards for old boilers are stringent. He said the agency has been deliberate in crafting regulations for ocean burning to safeguard the public health.

The decision by Waste Management, the world's largest hazardous-waste disposal company and owner of the only U.S. operating incinerator ships, creates an uncertain future for a technology once considered a hopeful option for disposal of some of the 250 million tons of the toxic chemicals and metals generated annually in this country.

The company, which owns two vessels -- Vulcanus 1 and Vulcanus 2 -- had planned to burn up to 80,000 tons per year at sea, including half of the nation's polychlorinated biphenyl (PCB) wastes. One of the ships operates in the North Sea, off the Netherlands.

Burying toxic wastes in landfills is now discouraged because of the threat to ground water, and the EPA prefers incineration as a form of disposal. In 1985, the agency concluded that incinerator emissions are relatively safe and that sea-based burns pose lower cancer risks than those on land because of distance from populations.

Many environmentalists and residents of coastal communities oppose sea incineration for fear that releases of such toxic chemicals as hydrochloric acid would waft ashore and destroy marine organisms living on the ocean's surface.

"We've been saying all along that this is risky business," said Sally Lentz, staff attorney for the Oceanic Society, who called the company decision a significant victory for the environment. "Without an industry pursuing it, it won't be sensible for EPA to consider this technology."

The agency has regulations to govern ocean burns but proposed to strengthen them in February 1985. Three months later, Waste Management asked permission to demonstrate Vulcanus 2 in a burn of 700,000 gallons of PCB-laden waste 140 miles off Ocean City, Md. The request was denied after strong citizen opposition. The EPA ruled that those concerns could best be resolved by completing regulations.

The company, which had first applied for a permit in 1981 and was rebuffed two years later, filed suit against the EPA in February 1987. The judge was asked to force the EPA to expedite its new regulations or consider a permit for Waste Management under the old ones. The court upheld the EPA, which has still not issued the rules.

Brown criticized the EPA for its "unending series of maneuvers to avoid making a decision" in reaction to citizen and environmentalist opposition. He said the lengthy regulatory process diverted the company's resources from other disposal innovations and was no longer worth pursuing.

At the same time, Brown said, the EPA's proposal in May to regulate land-based incinerators would "undermine any new investment in more sophisticated and safer technology" by exempting furnaces built before the rules become final. This creates "market uncertainty" for Waste Management because older boilers would be able to destroy wastes less expensively than ocean incineration, he said.

Brown said the firm would still offer its services overseas, despite a decision by environmental leaders of North Sea nations to stop ocean burning in 1995. He said incineration is safer than land burial and sea operations are safest because of their distance from people. "It's not a victory for environmental protection," he said of his company's decision not to pursue a permit.