The hottest film in town last week was neither "Gandhi" nor "The Black Stallion Returns." Those big-budget movies were upstaged by a half-hour documentary about duck hunting that cost $28,500 to make and is exciting enough to put an auditorium of insomniacs to sleep.

"Field Testing Steel Shot" is the title of a movie that has provoked a double-barreled donnybrook between the Interior's U.S. Fish and Wildlife Service, which sponsored the film but now calls it "technically distorted," and one of the country's largest private conservation organizations that is doing its best to "free" the movie.

"Any public display or dissemination of the (movie) is unauthorized, illegal and a gross misrepresentation," reads a press release by the Interior Department, which has confiscated every known copy of the film except one bought last June by the National Wildlife Federation.

"The Interior Department is suppressing a taxpayer-financed film on a critical conservation issue," charged federation executive Jay D. Hair in a counter press release that characterized Interior's legal threat as "an outrageous bluff."

"The federation intends to give the film wide distribution," he said.

The disputed documentary is the latest episode in a long-running and emotional debate over the use of lead-filled shotgun shells to hunt waterfowl.

Until recently, the National Wildlife Federation and Interior were on the same side in the fight.

There is little disagreement over the toxic effects of lead on ducks and geese. Interior studies estimate that 2 million waterfowl die each year as a result of swallowing the lead pellets, mistaking them for grist.

For more than a decade, the federation and Interior were united in encouraging the use of alternatives to lead, such as nontoxic steel shot.

But federation critics such as Hair charge that, in the last two years, since James Watt took over at Interior and Ray Arnett was appointed by President Reagan to head Fish and Wildlife, the Interior Department has "completely reversed past policy . . . suppressed news of waterfowl deaths attributable to lead poisoning" and "stopped or slowed the release of already completed research documenting the problems of lead poisoning from shotgun pellets."

John Mattoon, an official with Interior and the man who went to the federation building last week asking for the return of the film, denies that Interior has jettisoned its support for steel shot or suppressed any information.

Matoon says the film was never given final approval because it "overemphasized the advantages of steel shot, which would be a disservice to the hunter."

It is ironic that Interior's point man in this controversy, Arnett, is a past president of the wildlife federation and a member of its executive board until a few years ago.

People who worked with him at the federation say he never hid his hostility to state or federal attempts to prohibit lead shot.

There are 32 states with steel-shot-only zones. In 1979, the General Assembly in Maryland passed a bill, after stormy debate, prohibiting federal or state agencies from restricting the use of lead shot in the state.

"Ray represents the philosophical viewpoint at Interior that hunters in this country just do not need the federal government telling them what to do," said Ron Way, a federation official who last week kept the film in a locked vault until copies could be made.

"It's a personal crusade with him."

Interior officials say one of the major flaws of the movie, which was begun under a $28,500 contract during the Carter administration in 1979, is that it "totally ignores the crippling and other adverse effects of steel shot as compared with the same effects resulting from the use of lead shot."

The movie does address that question, but it concludes that steel shot actually reduces the number of birds that are wounded without being killed.

That conclusion is primarily based, however, on the experience of skilled hunters and guides, expert in the use of steel shot, who are shown killing an extraordinary percentage of ducks and geese at distances up to 70 yards.

"The ballistics analysis in the film tends to overemphasize the advantages of steel shot that average hunters would not realistically hope to achieve," reads the Interior press release.

Tom Roster, a former Fish and Wildlife shooting expert, is quoted in the film saying exactly what Interior claims the film conceals about steel shot, which holds a tighter pattern and travels 165 feet more per second than lead shot.

"The more experience a hunter has with lead, the more problem he will have with steel . . . You have to be a much more disciplined shooter," says Roster.

In another portion of the film, before a champion skeet shooter is shown missing targets repeatedly using unfamiliar steel shot shells, a voice-over warns that "steel shot is a sharp break from the lead shot tradition."

Interior's Mattoon says there are no immediate plans to take legal action against the federation. Meanwhile, the federation has scheduled free showings of the film Wednesday at 4, 5, 6 and 7 p.m. at its downtown headquarters at 1412 16th St. NW.

"We think the public should be allowed to see a movie their taxes paid for," said a federation official.

"Let hunters and other people make up their own minds."