A federal judge ruled yesterday that the Interior Department continues to allow the destruction and damage of crucial records that track the amount of money the government owes Native Americans for Indian lands it has managed for more than a century.

U.S. District Judge Royce C. Lamberth said Interior employees have come forward with new and credible evidence that the agency allowed at least 350 boxes of records to be ruined by mold in an agency office in New Mexico and left an untold number of boxes to be damaged under a leaking roof. Lamberth said Interior appears to have deliberately failed to report the damage, despite being under a court order to report on the safety of court records to a special master.

In this mammoth eight-year-old suit, 500,000 Indians assert that the agency, essentially the keeper of their inheritance, has failed to keep accurate records of an estimated $10 billion in gas, oil and other leases on lands the government has managed since 1871.

Justice Department spokesman Charles Miller declined yesterday to comment on Lamberth's ruling. Justice is representing the Interior Department in the suit.

The judge yesterday ordered Interior to provide a complete report on the current status of the records within 10 days and to file all reports directly with his office "under the penalty of perjury."

"The actions of Interior and Secretary [Gale A.] Norton in this instance again demonstrate why the Court continues to believe that Interior sets the gold standard for mismanagement of a government agency," Lamberth wrote. "Interior has once again proven that it can not be trusted and is in need of judicial oversight."

The judge's newest criticism of the agency comes one week before Interior lawyers are scheduled to argue before a federal appeals court that Lamberth has no authority over them. The agency has been locked in an unusually fierce and personal battle with Lamberth, who found Norton in contempt of court for failing to follow his orders to account for money owed to the Indians. He had earlier found Clinton administration officials in contempt in the same litigation.

The specific instances of damage that Interior employees brought to the court's attention this spring and summer are new, but the nature of the allegation is not. An Interior lawyer with whistle-blower protection testified in 1999 that he refused an agency order to get rid of hundreds of trust fund records, and that he knew of many missing records.

Keith Harper, a lead attorney for the Native Americans in the case, said the Interior Department does not deny the damaged records but rather denies it has to listen to the judge.

"Even after all the orders, the practice continues," he said, adding that it is obstinacy.