Thousands of the oldest home septic tanks are failing in the counties surrounding Washington, prompting anxiety that untreated, disease-producing sewage could be discharged into wells and streams.

The rapid growth of septic systems, which dispose of waste water from sinks and toilets, is a byproduct of suburban expansion in Virginia and Maryland. Two of every five homes rely on them, and the number is rising. Virginia added 17,000 septic tanks last year, Maryland about 7,400.

As the number goes up, government officials in both states also are expressing concerns about the effect of tanks on the region's sprawling development patterns and pollution of the Chesapeake Bay.

"Sooner or later, we need to come to grips with this issue," said Fairfax County Supervisor Gerald W. Hyland (D-Mount Vernon). "We're going to have more failed septic tanks, which is going to be a major challenge."

Solutions are expensive and divisive. The cost of repairing, replacing and expanding septic and public sewer systems in Maryland is approaching $2 billion. And many neighborhoods are split between residents who want their homes hooked to public sewers and those who fear that public sewers would lead to more sprawl.

In Loudoun County, 15 communities have widespread septic tank problems. State officials have warned the entire 700-person town of Hamilton of a potential health emergency from failing tanks. For six years, Craig Hagberg, of Hamilton, has lived with a failed septic drain field that he says leaves unsightly puddles in the back yard and a lingering odor "that can get pretty bad at times."

In cities, waste water flows into pipes that carry it from homes to a treatment plant. There, many of the harmful bacteria are removed before the water is discharged into lakes, rivers, streams and oceans.

Building such public sewers in rural areas and outlying suburbs is impractical because there aren't enough people to justify the expense. Instead, 7 in 10 rural homes have underground septic tanks that act as individual treatment plants.

In a typical system, solids and liquids flow from the home through a pipe to an underground tank. The solids settle in the tank, and the liquids leach over time into the soil and eventually into the ground water. Bacteria break down the remaining solids, changing most of the sludge into gas. Any solids left must be periodically pumped from the tank.

At least once a month, Hagberg pumps out his tank at a cost of about $150. "I don't have a choice," he said. "I'm stuck with it. Until we get the public sewer extended, I don't have a solution."

Emotions run high over septic tanks. Proponents of a recent -- and ultimately failed -- attempt by Loudoun to adopt regulations covering septic tanks were derided as the "potty police" by those who balked at government interference with their property.

Hyland's Fairfax district includes Mason Neck, a 9,000-acre boot-shaped peninsula of forests, pastures and parkland in southeastern Fairfax that sticks out into the Potomac River.

Many of the septic systems there are deteriorating, and some of the 1,800 residents have asked the county to hook their homes to public sewers. But other residents say that step would make it easier for developers to build more homes, destroying the bucolic setting.

Residents and county officials can't agree on a solution; in the meantime, leaky tanks continue to threaten health. Typhoid, cholera and hepatitis A are among the diseases carried by sewage.

"Any time you have a failing sewage system, you have an actual or potential health hazard, but we just can't fix them all at once," said Donald James, director of environmental health for the Virginia Health Department.

The good news, health officials say, is that systems installed today are better built than older ones and that local officials are stepping up enforcement of regulations.

The bad news is that about 20 percent of existing systems were put in before 1970 and are poorly designed, cheaply built and improperly maintained.

Local regulations vary. Prince George's County adopted tougher requirements in 1969, and the rate of septic system failures fell. The Maryland county issues about 12 permits for repairs a year and 20 to 30 "health hazard relief letters" asking the water authority to speed hookups to public sewers for homes whose septic tanks pose a risk. Recently, Fairfax and Prince William counties in Virginia adopted ordinances requiring that tanks be pumped out every five years. In Loudoun, however, homeowners are merely asked not to "misuse or neglect."

When Loudoun officials recently tried to be more explicit and define "misuse" and "neglect," as well as mandate regular tank maintenance, the effort was dropped after farmers and some rural homeowners complained about government intrusion.

Julien Schrenk knows well the problem posed by tanks and growth.

Schrenk left Falls Church in 1970 and moved into an 18th-century house in western Loudoun with a postcard view of rolling hills, a meandering creek and distant farms.

No more. Schrenk's little oasis will be surrounded by 86 houses in the next several years, not only spoiling the vista but also bringing dozens of septic systems. Schrenk's own tank once failed, causing toilets to back up and almost polluting the creek, and he's worried that the same thing could happen to his new neighbors.

"It's just not a pretty picture," said Schrenk, 72. "They're putting in too many homes too closely. It's increasing the possibility of contaminating our water."

In Virginia, about 5 percent of the state's 1 million septic systems are failing a year, about the same percentage as among Maryland's 350,000 tanks, according to state regulators.

In Maryland, counties near the bay are hardest hit, because the high water table and poor drainage of the soil make it difficult for septic systems to discharge deep into the soil. Charles County has leaky tanks in at least 63 subdivisions, the most in the state, followed by Anne Arundel County, with 42 neighborhoods.

But even houses in built-up sections of Bethesda, Potomac and Silver Spring are waiting to get patched into public sewers.

Across the Potomac River in Virginia, health officials in Fauquier County have warned of "growing health problems" caused by failing systems in the Catlett-Calverton, New Baltimore and Midland areas of the county.

More than two-thirds of Fairfax County's 35,215 septic systems are 20 years old or older, and many will need to be fixed at a countywide cost as high as $100 million, according to the county's health advisory board. Governments and homeowners share the tab for repairs or tying into public sewers, which can cost up to $20,000 per home.

Fairfax's supervisors were warned of the problem three years ago by their health advisory board but haven't figured out a solution. In addition to the health considerations, supervisors have concerns about where to allow development, as in the Mason Neck situation.

"I'm not suggesting this is going to be easy, but there ought to be a way to deal with septic system failures in a planned way, ahead of time, instead of just reacting as if it's a surprise," said Marlene W. Blum, head of the health advisory board.

Building consensus for a solution is not easy, as reactions in Hamilton demonstrate. Nearly half of Hamilton's septic tanks are more than 25 years old, the usual life expectancy, with failures increasing every year. But residents are split between those who want to be linked to the public sewer and others who don't want to be socked with part of the $2.8 million cost a hookup would involve.

Septic tank analysts stress the safety of modern tanks and note that aging public sewers also are wearing out and are expensive to fix. Patricia Miller, of the Virginia Department of Health, said huge strides have been made in the treatment of waste water since the pre-1970 days of cesspools and pipes that discharged directly into streams.

Michael T. Rose, a Laurel developer, said it's up to politicians to adopt zoning that encourages high-density development and the extension of public sewers. "You can't say, We're against sprawl,' but then, through zoning, allow lots of two acres, five acres and 25 acres," he said.

Maryland Gov. Parris N. Glendening (D) says too many county governments waste money and take away open space by allowing new homes to be built in undeveloped, remote areas where septic tanks are the only option.

It's more efficient, he says, to steer growth to established neighborhoods that already have public sewers. At Glendening's urging, Maryland's lawmakers passed a law last month allowing counties to spend state money on sewers, roads and schools only in designated growth areas, an approach they contend will help contain sprawl and the septic tanks that go with it.

Glendening was prompted in part by reports that septic tanks contribute to the overloading of nitrogen in the Chesapeake Bay, which encourages growth of algae. Decaying algae sap the water of oxygen needed by fish and aquatic plants.

"We can work to clean up our rivers by investing in farms and sewage treatment plants and still lose the battle for the Chesapeake Bay to rural sprawl and its comrade in arms, the lowly septic tank," said Bill Matuszeski, director of the Chesapeake Bay program for the U.S. Environmental Protection Agency.

The growth controls, supporters argue, could help Maryland deliver on its pledge to reduce the dumping of nitrogen and phosphorus nutrients into the bay by 2000. Public sewage treatment plants and farmers' use of fertilizers have been cited as the main sources of the chemicals. Less than 3 percent comes from septic tanks.

In a tiny Southern Maryland community directly on the bay, all of the issues related to septic tanks are playing out: leaky tanks, concerns about growth, and the health of residents and the bay.

On the southern end of St. Mary's County, about 75 miles from Washington, many of the 14 homes of the remote Bay Forest subdivision were built in the early 1950s, with septic systems that now need repairs or replacing. Some residents thought their problems were solved when a developer proposed building a 16-lot subdivision nearby, with a public sewer line that would serve the new homes as well as theirs.

But St. Mary's commissioners have twice nixed the sewer extension, asserting that it would encourage more houses in a rural area of the county where high density is not planned. The developer now is proposing a system of shared and individual septic tanks; a decision on that plan is scheduled this spring.

Bay Forest resident Dean Hey supports the tie-in to the public sewer in part to protect property values. "I just want to do well when I sell this place," he said. But resident Judy Osborn, who just spent $12,000 to replace her failed septic system, doesn't want to shell out more money to hook up to a public sewer that would bring "more cars and traffic." CAPTION: SEPTIC TANK SYSTEMS ESTIMATED NUMBERS IN A SAMPLE OF SUBURBAN AREAS In Maryland Montgomery:

50,000 Prince George's: 11,000 Anne Arundel:

49,000 Howard:

15,000 In Virginia Fairfax:

35,000 Prince William: 14,000 Loudoun:

12,000 SOURCE: County health departments HOW A SEPTIC SYSTEM WORKS 1. In a typical septic system, waste water from sinks and toilets flows from the house to a tank, where it separates into solids and liquids. 2. From the tank, the liquids then flow to a drain field, a series of underground trenches that absorbs them. The solids remain and are broken down by bacteria. Residue must periodically be pumped out. 3. The liquid moves from the soil to the ground water, a safe, natural process that usually removes pollutants. 4. The liquid leaching into the ground water contains nitrogen, which at high levels contributes to the contamination of the Chesapeake Bay. SOURCES: Environmental Protection Agency, National Small Flows Clearinghouse, West Virginia University CAPTION: Julien and Betsy Schrenk live in a house that has a panoramic view -- and a septic system. A pump inside the concrete housing carries sewage to a drain field. CAPTION: The Schrenks' 18th-century home will be surrounded by 86 houses in the next several years, bringing dozens of septic systems. CAPTION: SEPTIC TANKS SYSTEMS (This graphic was not available) CAPTION: HOW A SPECIFIC SYSTEM WORKS (This graphic was not available)