While the caldrons tended by enthusiasts at the University of Utah's cold fusion institute have never produced more than a trickle of excess heat, controversy surrounding the laboratory has suddenly boiled over.

Following recent revelations of mislabeled funds and legal threats directed at researchers who questioned the reality of cold fusion, the Utah faculty has demanded a financial and scientific audit of the National Cold Fusion Institute and called for the possible ouster of the university's president.

Faculty members say they are outraged that a lawyer working for the two stars of the fusion institute, Stanley Pons and Martin Fleischman, sent threatening letters to researchers who reported in a scientific journal that they saw no evidence of cold fusion in Pons's laboratory.

Pons and Fleischmann were the chemists who announced in a March 1989 news conference that they had produced fusion in a jar, offering hope for a cheap and inexhaustible source of energy.

While researchers at several laboratories continue to see signs that something unusual may be happening in the jars filled with heavy water and pallidium wires, most of the scientific community now discounts the possibility of limitless energy from cold fusion.

Indeed, it was reported last week that some of the pallidium wires used by researchers at three laboratories outside Utah were contaminated with tritium, which is a sought-after byproduct of nuclear fusion. The detection of tritium at Los Alamos National Laboratory and Texas A&M University was taken as a sign that fusion is occurring. The contamination of the wires with tritium now brings such proof into question, although researchers at both labs say that they still saw signs of fusion in wires that they believe are not contaminated.

"We're still in a legitimate state of confusion," said Edmund Storms of Los Alamos, upon learning that several pallidium wires that came from Texas A&M, and were made by a jewelry manufacturer, were contaminated with tritium. "It is definitely mysterious."

One of the most damning results, however, came from researchers housed at the birthplace of cold fusion. Soon after the discovery was announced last year, physicists at Utah were allowed to look for signs that neutrons and gamma rays were being emitted from Pons's laboratory. The group saw no signs of fusion and reported their negative results in the scientific journal Nature.

Soon after their paper appeared, the scientists were contacted by C. Gary Triggs, a Morgantown, N.C., lawyer who threatened "legal action" and demanded the researchers retract their paper on behalf of his clients Pons and Fleischmann. The authors have flatly refused.

"It's outrageous," said Michael Salamon, lead author of the paper. "It is really an unparalleled assault on academic rights. You don't threaten scientific colleagues with lawsuits. That just doesn't happen."

"I have never heard of anything quite like this," said Richard Nicholson, executive director of the American Association for the Advancement of Science and publisher of the weekly journal Science. "If this became the way people behaved it would have a chilling effect on science. Nobody would ever publish anything."

In his letter, Triggs said Salamon and his colleagues not only presented "factually inaccurate" information that caused "undue ridicule and negativism" but that the group's experiments "were predesigned to provide the negative results."

Salamon denied that his conclusions were slanted. "It was our professional experience that there was no evidence of fusion," he said. Pons and Triggs could not be reached for comment. Salamon said he has not spoken with Pons in months. Triggs sent a second letter to Salamon last week, apologizing for any "concerns or misconceptions my last letter may have caused you."

Following disclosure of the letter, a group of 22 professors representing the departments of mathematics, chemistry, physics and biology requested that the university undertake a complete review of the science and finances of the cold fusion institute. The meeting was presided over by Hugo Rossi, former director of the cold fusion institute.

"There has been a lot of discontent that certain aspects of the cold fusion business have been mishandled," said Craig Taylor, chairman of the department of physics. "Those of us at the meeting felt the college of science had to make a stand, that our scientific reputations were on the line and academic freedom was being maligned."

The faculty senate, meanwhile, passed a motion requesting that the school's governing board examine whether university President Chase N. Peterson should resign.

The faculty was upset about the discovery that $500,000 given to the cold fusion institute and described by the university as an "anonymous donation" was money belonging to a university research fund, over which Peterson had control.

The current director of the cold fusion institute, Fritz Will, said he found the letter sent by Triggs to be "totally unacceptable." Will also said that until now he did not know the source of the $500,000 "anonymous donation" to the fusion institute, which is now supported with about $5 million from the state of Utah.

Will, however, said the political and funding issues should be examined separately from the science of cold fusion. He said he hoped that an outside board of experts would review the science, instead of university scientists, who Will said were too emotionally involved. Details of how the review will proceed are now being negotiated.

The controversy has already had a tangible effect on the institute. Last week, an official with the Electric Power Research Institute (EPRI) said his organization has decided to hold off on a $170,000 grant. "Given the situation, we felt it prudent to pause in our negotiations," said David Worledge, a scientist with EPRI in Palo Alto, Calif.