The Chesapeake Bay Foundation said a plan by the Army Corps of Engineers to relax wetland regulations may cause a substantial loss in wetlands.

The group "is extremely concerned about the substantial loss of wetlands that would be allowed" under the proposal, said Jean Watts, a staff scientist with the foundation.

The corps last week proposed that landowners be allowed to develop nontidal wetlands if the land had been cleared and used for farming prior to December 1985.

"It's a realization on our part not to regulate what isn't functioning as a wetland," Col. Joseph J. Thomas, the corps Norfolk district engineer, said of the plan.

Watts said the plan conflicts with the goals of the Bush administration and the Chesapeake Bay Agreement among Virginia, Maryland, Pennsylvania and the District of Columbia. Both the agreement and President Bush have said there will be no net loss of wetlands because of development.

"This would be a sweeping change," Watts said.

Scientists estimate Virginia loses 3,000 acres of wetlands every year. Environmentalists say the wetlands help filter out pollution before it reaches the bay, act as a buffer protecting the soil from damaging storms and floods, and are an important wildlife habitat.

The Food Security Act passed Dec. 23, 1985, strictly protects wetlands on farms from being drained or damaged, Thomas said. Under the corps's proposal, only wetlands cleared before the act was signed would be eligible for development, he said.

Developers praised the corps's actions as reasonable.

"I think all this is moving in the right direction, and I'm delighted to see it," said Hal Morris, president of the Peninsula Housing and Builders Association.

The public will have until July 5 to comment on the proposal. Thomas said no decision has been made on whether to hold a public hearing on the plan.