An advisory panel to the Environmental Protection Agency will formally recommend today a substantial reduction in the use of a widely used gasoline additive that has significantly reduced air pollution in many metropolitan areas but has also contaminated groundwater supplies from California to Maine.

While recognizing the widespread air quality benefits that have accrued from the addition of MTBE (methyl tertiary-butyl ether) to gasoline to make it burn more efficiently, the panel will acknowledge growing concerns about water contamination from leaking storage tanks and other gasoline spills. According to the panel's report, from 5 percent to 10 percent of drinking water supplies in areas where so-called reformulated gasoline is required have shown detectable amounts of MTBE.

Required under the 1990 Clean Air Act in areas with severe air pollution problems, reformulated gasoline containing oxygen is now sold in about 20 states, including Maryland, Virginia and the District of Columbia. The most widely used oxygenate in reformulated gasoline, MTBE reduces emissions of carbon monoxide, smog-causing pollutants and toxic chemicals.

However, in recent years there have been growing concerns about MTBE contamination of ground and surface waters, including well-publicized incidents near Lake Tahoe and Santa Monica, Calif., that earlier this year led to an order by Gov. Gray Davis to phase out its use by the year 2002. Maine officials have also taken steps to reduce the use of MTBE, which some studies have shown causes cancer in laboratory animals.

Daniel Greenbaum, a former Massachusetts environmental protection commissioner who headed the panel, said that some members had recommended a total phase-out of MTBE but that a majority was not convinced of an imminent danger. "I don't think any of us concluded it is a major public health threat right now," Greenbaum said, "but rather we acted out of a concern it might become that."

Though Greenbaum said that MTBE "is less potent than some other components" of gasoline, the additive is extremely soluble in water and spreads rapidly in groundwater where it can pollute wells and lakes. Though its health effects on humans are not well understood, some people whose wells have been tainted by MTBE and its turpentine-like odor and taste have complained of asthma attacks and flu-like symptoms.

Anticipating the advisory panel's recommendations, EPA Administrator Carol M. Browner said yesterday, "We must begin to significantly reduce the use of MTBE in gasoline as quickly as possible without sacrificing the gains we've made in achieving cleaner air."

To that end, Browner promised to work with Congress on remedying the Clean Air Act's requirement that 2 percent of reformulated gasoline consist of oxygen, a provision added to the act to promote the use of ethanol. She also pledged to bolster EPA's efforts to crack down on leaking underground storage tanks, a major source of MTBE contamination.

Officials with the Oxygenated Fuels Association yesterday hailed the panel's emphasis on stopping gasoline storage tank leaks, but said its recommendation of a substantial decrease in the use of MTBE would cause gasoline supply shortages and price increases in some regions.

"If underground storage tanks are fixed, we will not have contamination of ground water," said Terry Wigglesworth, the association's executive director.

But government-mandated reductions in the use of MTBE, she said, would mean that "Americans will be paying more for dirtier air."

Only about 3 percent of the nation's gasoline supply contains MTBE, but the percentage is considerably higher in states where reformulated gasoline is sold. Officials at the Oxygenated Fuels Association maintain that there is an insufficient supply of alternatives such as ethanol, and that eliminating the use of MTBE could cut gasoline supplies by as much as 700,000 barrels a day.

The net result, predicted the association's technical director, Nick Economides, could be gasoline prices "in the double-digit cents-per-gallon range."