Federal agents in several cities yesterday moved to begin seizing the public housing leases of suspected drug dealers under procedures hurriedly modified by the Department of Housing and Urban Development to comply with a federal judge's ruling banning on-the-spot evictions.

The targets are the first in a controversial demonstration project that supporters contend will help root out drug markets in public housing in about 20 cities. Critics claim the plan will punish people who may be innocent of any drug activity.

Under the program, HUD can seize the lease of any individual who has "participated in, or knowingly allowed, at least two felony drug offenses" in a public housing unit, according to a HUD description. The agency can act against an individual who has not been charged or convicted of any offense, if the person has been identified in a search warrant or police affidavit as someone who sells drugs or "knowingly condones" drug trafficking in the apartment, said HUD counsel Frank Keating.

HUD rules provide that the leases can be seized if the property is "an open and notorious site of drug distribution."

As originally conceived, tenants may or may not have been given a hearing before being evicted, depending on the practice in the local jurisdiction. But on Friday, U.S. District Judge Richard L. Williams in Richmond blocked the department from evicting tenants under the program without conducting a hearing.

Now, Keating said, a tenant who stands to lose an apartment will first be given a notice of seizure and allowed to present the case to a federal magistrate or judge. In addition, the tenant will continue to be allowed a court hearing when the department moves to take over actual ownership of the lease. "They'll have two hearings," Keating said.

Four raids were planned yesterday, Deborah Burstion-Wade, a spokesman for the Justice Department, said.

Since 1987, the public housing authority in New York has conducted 22 unchallenged seizures, according to Keating.

He said federal officials hope the program will replace drug dealers with law-abiding citizens who cannot now obtain public housing because the units are all taken. "Decent people should be able to get in. Drug thugs should get out," he said.

The program, to be administered by public housing agencies and federal prosecutors, has drawn criticism from civil rights and tenant activists, including Robert McKay, executive director of the Council of Large Public Housing Authorities. McKay said if a drug dealer is not the lease-holder, "You're terrorizing the family."

A HUD statement released yesterday said "careful consideration will be given to family members, and any children or elderly residents involved will receive temporary housing or other social services."