StarKist Seafood Co. yesterday announced it will no longer buy tuna caught with methods that kill dolphins, a step that environmentalists said would result in thousands fewer dolphins dying in tuna fishing nets each year.

The announcement by the world's largest tuna canner, supplier of 35 percent of the tuna sold on U.S. grocery shelves, demonstrates the growing power of the environment as a factor in corporate decision-making. Company officials said StarKist tuna henceforth will be labeled "dolphin safe" and that they plan to exploit the new policy in advertising campaigns.

"We think this is a situation in which virtue will have its own reward," said Anthony J.F. O'Reilly, chairman of H.J. Heinz Co., the giant food conglomerate that owns StarKist and has been under increasing pressure from consumers and environmentalists concerned about the dolphin kills.

Heinz also plans to put the labels on its Nine Lives brand cat food containing tuna.

Within hours of the announcement, the two remaining major domestic suppliers of canned tuna -- Bumble Bee and Chicken of the Sea -- announced they also were adopting a dolphin-safe policy. StarKist officials said the new policy would likely raise the cost of a can by "a couple of cents."

The three companies account for about 75 percent of the U.S. tuna market.

The change in fishing methods stemming from the new policy is expected to substantially reduce the estimated 100,000 dolphin deaths caused by tuna fishing each year. Most of the deaths occur in the coastal waters of the Pacific Ocean in an area from Chile to Southern California, where tuna boats use giant "purse" nets to encircle yellowfin tuna, often killing or maiming the dolphins that swim alongside the tuna and are also caught in the nets.

Company officials said they will rely on reports from observers stationed on board fishing boats in determining whether to buy a particular catch of tuna. Observers from the National Marine Fisheries Service currently live aboard all domestic tuna boats, while 30 percent of foreign tuna vessels are manned by observers of the Inter-American Tropical Tuna Commission.

Although tuna are caught elsewhere in the Pacific as well as the Atlantic, fishing industry spokesmen said the new policies will force many tuna fishermen out of business. "It will severely impact the fleet if not destroy it in its traditional fishing grounds," said August Felando, president of the American Tuna Boat Association.

The new tuna policies are but the latest in a series of recent announcements by major corporations seeking to burnish their image with consumers and environmentalists as the nation approaches Earth Day on April 22. On Tuesday, Conoco Inc. said that in the future all new Conoco tankers will be equipped with double hulls, a safeguard against oil spills that the oil industry has long resisted.

In addition, a variety of companies adopted "green" labeling practices to promote their products as environmentally sound. Earlier this week, newsrooms across the country were deluged with another Heinz product -- samples of a new carpet made from recycled plastic ketchup bottles. And Shell Oil Co. introduced a new "environmentally enhanced" gasoline to cut down on air pollution.

Environmentalists who for years have urged consumers to boycott tuna were surprised and delighted by the StarKist announcement.

"We are completely convinced of Heinz's sincerity," said Sam LaBudde, a California biologist who three years ago took a job as a cook on a tuna vessel and videotaped startling images of dolphins dying in fishing nets. Labudde's tape is widely credited with stirring the congressional and public outrage that culminated in yesterday's announcement.

"They are setting a standard to which we hope everyone else will repair," said Sen. Joseph R. Biden Jr. (D-Del.), co-sponsor of a bill that would require tuna companies that do not practice dolphin-safe methods to say so on their labels.

He added, "It is probably one hell of a sound business judgment that is being undertaken here. . .I can't fathom {children} not telling mommy and daddy as they go to the grocery store, 'Buy the one that says dolphins aren't hurt.' "

Enviromentalists have raised alarms about the killing of dolphins in tuna nets since the early 1970s, when the annual dolphin kill approached 500,000, according to the Washington-based Center for Marine Conservation. Concern over dolphin deaths was a major factor in the passage of the 1972 Marine Mammal Protection Act, the nation's principal conservation bill for marine mammals.

Since then dolphin deaths have declined precipitously as tuna fishermen have modified their practices to comply with tougher federal regulation. But, under pressure from the tuna industry, Congress has continued to allow U.S. tuna fishermen to kill 20,500 dolphins each year, with foreign tuna fleets making up the remainder of the kill.

Virtually all of the dolphin deaths occur in the eastern Pacific, one of the world's most productive tuna fisheries and the principal fishing ground for about 28 of the 63 vessels that make up the U.S. tuna fishing fleet. For reasons not totally understood, the yellowfin tuna that inhabit the eastern Pacific tend to swim in schools with dolphins.

Tuna industry spokesmen said that because there is no absolute guarantee some dolphins will not become ensnared in tuna nets, it is unlikely they can continue to profitably fish the area given the new dolphin-safe standard.

"It's taking away a fishery that has historically been the most reliable for the canned tuna market," said David Burney, executive director of the U.S. Tuna Foundation.

But StarKist officials said that tuna vessels can continue to fish for schools unaccompanied by dolphins or refit their boats with heavier equipment that would allow them to venture into the western Pacific and other areas.