President Bush, his senior aides embroiled in what one aide called a "madhouse" of debate over an Education Department decision to bar most colleges from awarding scholarships based on race, refused yesterday to repudiate or embrace the policy.

One official said much of the president's senior staff lined up on different sides of the issue and a variety of statements were drafted for and against the policy. Secretary of Health and Human Services Louis W. Sullivan, the highest-ranking black in the administration who was described by aides as "very concerned" about the issue, met with White House Chief of Staff John H. Sununu and asked for a role in the policy debate to ensure minority education would not suffer.

Asked whether he supported or rejected the departmental ruling that "race-exclusive" scholarships are discriminatory and violate the 1964 Civil Rights Act, Bush praised the author of the ruling, Michael L. Williams, an assistant secretary of education, and said, "We're looking at it."

The controversial ruling has been strongly criticized by civil rights, education and business community leaders, and for the second day in a row was the subject of inconclusive debate among White House aides, in large measure because some aides wanted the president to quickly and decisively repudiate it.

One official called the White House "a madhouse" of aides proposing and writing statements for Bush to offer, of others objecting and of some "running around half-cocked," according to a third official.

White House press secretary Marlin Fitzwater said that while many Bush advisers "have opinions" on the issue, the president decided he would not take any position without more information. "We are going to take whatever time necessary to do a thorough review and to consider all the legal, practical and political ramifications of this," Fitzwater said describing Bush's order.

The ruling by Williams, apparently made without any consultation with the White House, confronts Bush with an issue conservatives in Congress and in his administration had just begun to look at as part of a broader policy debate over quotas and equal rights.

Administration officials had anticipated that quotas and affirmative action would emerge as major issues in the next session of Congress, with Democrats pledging to reintroduce the civil rights bill Bush vetoed last fall and continue their attack on the GOP as racially insensitive.

As Bush begins defining his domestic priorities for his third year in office, a pivotal period for determining the issues he and other Republicans will promote and run on in the 1992 elections, some members of Congress trying to formulate a Republican message are examining whether that message ought to include the thesis that federal programs should be totally "color blind." That would mean an end to minority contracting preferences and programs that "set aside" a certain amount of their contract for minorities.

Both Sen. Phil Gramm (Tex.), the newly elected chairman of the National Republican Senatorial Committee, and Rep. Newt Gingrich (R-Ga.), the House minority whip, said in interviews this week that the GOP should consider taking the theme embodied in Bush's veto of the 1990 Civil Rights Act because it was a "quota bill" and expanding it to include a broad attack on programs and policies at any level that provide special treatment for minorities.

Gramm, noting that Democrats and Republicans alike say they oppose quotas, said he might introduce an "equal access" amendment to the civil rights bill the Democrats are expected to introduce that would require federal contracts be open equally to all. "If you are going to say that quotas are wrong," Gramm said, "then you have to go back and think through the whole issue of set-asides."

"I believe George Bush believes in a color-blind, rather than a color-based America," said Gingrich, who argues set-asides are "color-based" and thus unfair. Making the case that all Americans should be treated equally, both politicians said, was a powerful political argument.

The White House appears much more hesitant to venture into the politically risky waters of challenging decades of federal policy that recognized economic and education disadvantage and discrimination against minorities by setting aside some contracts for them.

"We're willing to listen to suggestions" on the broader issues, said a senior administration official. "Our feeling now is just send up a {civil rights} bill like the president sent up before" rather than taking a broader approach.

A senior adviser to Bush said the Education Department's ruling on scholarships puts Bush under unexpected pressure to decide how far he wants to go in the debate. "It means he's got to think about it faster than he wanted," he said, calling the unexpected ruling "a wild card in the game."

According to administration sources, White House counsel C. Boyden Gray made the case to Sununu yesterday that Bush needed more facts about the scholarship issue and more time to assess them before taking any action.

Gray was said to argue that Williams's ruling "may turn out to be correct in every respect" and that ciriticism has been engineered by the civil rights and liberal community and the Bush should not respond to it.

On the other side, sources said, were advisers such as staff secretary James Cicconi, Sununu political aides Ed Rogers and Andrew Card and Cabinet secretary Ede Holiday who argued that the new department regulations sent a damaging political message to minorities that Republicans have been trying to attract.

Fitzwater, acknowledging there were a lot of "emotional" opinions on the subject, said yesterday that Sununu had decided Bush should not move either way until a broader assessment he predicted would take "at least several days" has been completed.