The Endangered Species Act applies not just to wildlife within the United States but to plants and animals anywhere in the world if they are threatened by projects funded by the federal government, a federal appeals court has ruled.

In a decision hailed by environmental groups, a three-judge panel of the 8th U.S. Circuit Court of Appeals ruled last Friday in favor of Defenders of Wildlife, which had challenged a regulation promulgated in 1988 by Interior Secretary Manuel Lujan Jr. The regulation said federal agencies funding projects abroad need not consult with the Interior Department about the impact their plans may have on wildlife placed on the government's endangered species list.

The ruling does not affect private organizations that carry out projects abroad independent of federal programs. But environmentalists said those groups could still be subject to civil suit under the Endangered Species Act if their developments damage habitats in which endangered species live.

The court said the Endangered Species Act clearly demonstrates congressional commitment to worldwide conservation efforts and that limiting the consultation requirement to endangered species within the United States runs contrary to such a commitment.

Members of Defenders of Wildlife testified that they had visited foreign countries to observe developments funded by federal agencies and found that some of those projects posed a threat to endangered species. In Sri Lanka, for example, the Mahaweli water resource project, which was funded by the Agency for International Development (AID), endangered Asian elephants, crocodiles and leopards, according to the observers.

"Since 1986 the Reagan and Bush administrations have run the risk of jeopardizing whole populations of endangered wildlife overseas," said John Fitzgerald, counsel for Defenders of Wildlife. "This decision means that the U.S. can no longer be less careful with the rare wildlife of other countries than it is with its own."

The Interior Department has 90 days to appeal to the Supreme Court or it may ask within 10 days for the full 8th Circuit to review the case.

"Because the implications of this case go beyond the Interior Department, and affect the conduct of foreign affairs, we need a further administration review before deciding whether to appeal," said Steven Goldstein, an Interior Department spokesman. "This case is a good example of environmental politics being played at the global level."

Several agencies, including the Army Corps of Engineers, the State Department and the Defense Department, were opposed to applying the Endangered Species Act outside the United States. But others, including the Council on Environmental Quality, the Interior Department solicitor's office and the general counsel's office of the National Oceanic and Atmospheric Administration's, agreed that it is necessary to extend the consultation duty to foreign countries.

A spokesman for AID had no comment on the court ruling.

"My belief is that conservation practices that we adhere to at home, we should be willing to adhere to overseas in terms of protecting the environment," said Mark Plotkin, vice president of the environmental group Conservation International.