NORFOLK -- A clarification of how the U.S. Army Corps of Engineers defines wetlands could mean an additional 700,000 acres in Maryland and 200,000 acres in Virginia will be open to development, officials said.

Maj. Gen. Patrick J. Kelly, the corps' director of civil works, told corps district offices nationwide by letter last week that 60 million acres of freshwater wetlands cleared of their native vegetation and drained for farming before December 1985 will not be regulated under the Clean Water Act.

"This is land that before the new manual came out was not even regulated by the corps," said Carol Todd, a corps spokeswoman. "It's land that we couldn't discern if it was wetland or cropland."

Todd said the corps' limited resources could now be focused on preserving "really high-value wetlands."

In Maryland, the nontidal wetlands are important in filtering pollutants before they reach the Chesapeake Bay. But some of them are of minimal ecological value, according to the corps.

The nontidal areas are dry much of the year and years of farming have so altered them they are wetlands in name only, the corps said.

Torrey C. Brown, Maryland's secretary of natural resources, said state regulations for some wetlands on farm property will be eased next year after the changes in the federal policy. He said he agreed with the federal action.

Farmers and other landowners on the Eastern Shore had vehemently opposed the corps' wetlands regulations.

While not changing the definition of a wetland, the corps' action last week gave farmers some reprieve.

"It should free up a lot of farmers from worrying about what they can do with their land," said Mark Powell, assistant editor of the Delmarva Farmer, an agricultural weekly.

The Izaak Walton League of America criticized the deregulation and said it could cause the permanent loss of wetlands up and down the bay.

Linda Winter, the group's Chesapeake Bay coordinator, acknowledged it would be difficult to show the specific impact on the water quality. "The bay is just too complex for that kind of cause-and-effect relationship," she said.

Brown insisted that Maryland's genuine wetlands would still be protected under the state's pioneering wetlands protection act that goes into effect Jan. 1.

More than 60 million acres would be affected nationally, according to U.S. Soil Conservation Service estimates. About 79,000 of the Virginia acres are in the Hampton Roads area.

"It looks like a great potential burden has been lifted," said C.W. "Billy" Shirley, a farmer and a member of the Chesapeake Planning Commission. "For owners of cropland, life will go back to the way it used to be before these new regulations."

Officials in Virginia Beach, where several proposed sites for new schools are farmed wetlands, also expressed relief.

"It really is of enormous importance to us because the majority of our growth is going to be in the city's southern half, where we have enormous wetlands problems," said Gregory N. Stillman, president of the Virginia Beach School Board. "Without that ruling, we may really very well have not been able to find sites {for schools} at all ... . And we've got a lot of schools to build."

But David W. Carr Jr., of the Southern Environmental Law Center in Charlottesville, said Kelly had imperiled some valuable natural resources that the corps by law should be protecting by the case-by-case permitting system.

"Some farmed wetlands are not at the fringe, and they're not of marginal ecological value," Carr said. "I don't know how the corps can establish that all of them are without value from Washington. They have to make that judgment in the field."

Under federal definitions, land is a wetland if it has three characteristics: a prevalence of wetland plants, a wet type of soil and an inundation of the soil by surface or ground water for at least part of the year "under normal conditions."

For wetlands cleared of trees, plants and shrubs before Dec. 23, 1985, the "normal condition" of the land is farming, Kelly said in his letter. The deadline is the date Congress passed the Food Security Act of 1985 to stop the destruction of wetlands on farms.