NEWPORT NEWS, VA. -- Virginia and Maryland officials are studying a proposal to use material dredged from Chesapeake Bay shipping channels to restore and rebuild eroded islands in the bay.

"This is one example of using dredged materials for environmentally beneficial purposes instead of treating them like wastes to be disposed of," said John Gill, biologist with the U.S. Fish and Wildlife Service in Annapolis.

Using the material to rebuild islands would solve the problem of finding sites for the millions of cubic yards of fill that must be removed from shipping channels to make way for newer and bigger ships.

"It seems silly to spend a lot of money to dispose of something when you could spend equal or less money to put it to a good use," Gill said. "Our theory is to use it as a resource, not look at it as a negative."

Gill has been working on the Maryland project for about a year.

The Virginia Port Authority and the Army Corps of Engineers last month authorized a similar study that will cost $1.5 million and take about three years.

Dredged material from the Baltimore harbor is being dumped into Hart Miller Island, a man-made, diked peninsula similar to Craney Island on the James River in Portsmouth.

Like Craney Island, which isn't expected to reach its capacity until 1997, the Baltimore harbor dump site is almost at its limit.

The Maryland project began by charting islands from the mouth of the Chester River, just north of Baltimore, south to the Virginia border and comparing oceanographic maps from the early 1800s with current maps.

Gill discovered that of the 35 islands that existed in the 1800s, 12 had been lost to erosion. The remaining islands also were significantly smaller, having lost more than 10,500 acres to erosion.

"Most all of these eroded areas were wetlands, which led us to believe that maybe we can create new wetlands around the existing islands," Gill said.

Gill said some of the islands under consideration for restoration, such as Barren Island and Bodkin Island, are privately owned. The owners would have to agree to any dumping plans. Other islands such as Eastern Neck Island and South Marsh Island are owned by the Fish and Wildlife Service and used as national refuges.

The cost of restoring eroded islands would be high, Gill said. "But there is a lot of public benefit in what we're looking at, particularly the habitat feeding of a lot of commercially important fish."

A proposal to create 1,000 acres of wetlands at Poplar Island is some indication of the expense, Gill said. The cost of bringing in stone to create bulkheads for the new wetlands would be $7 million, and that doesn't include money for engineering work, transportation of the fill or building the dikes, he said.