Union leaders and public interest groups have reacted with astonishment to a White House directive that says proposed federal safety regulations ultimately could endanger the health of shipyard and other industrial workers.

"This is really off the wall," said Paul J. Burnsky, president of the Metal Trades Department of the AFL-CIO, which represents thousands of U.S. shipyard and ship repair workers."I think this is quite unique," added Gary Bass, director of OMB Watch, a Washington group that monitors the White House Office of Management and Budget. "I've never seen a letter as ludicrous as this one."

They were referring to an OMB letter to the Department of Labor last week ordering the agency to suspend a proposed rule extending air contamination standards to workers in the the maritime, construction and agricultural industries.

The rule, which covers more than 600 contaminants, was drafted by the Occupational Safety and Health Administration. The original standards have been in place for three years.

According to the letter, the proposed regulation "fails to answer" how the rules affect workers' employment, wages and health. It was signed by James B. MacRae, acting administrator of the OMB's office of information and regulatory affairs, who was unavailable for comment.

"If government regulations force firms out of business or into overseas production, employment of American workers will be reduced, making workers less healthy by reducing their incomes," the MacRae letter said.

Mr. MacRae cited statistics from a recent federal court decision saying that each $7.5 million in additional regulatory expense could cause one additional death from the impact of reduced income.

He went on to conclude that "about eight to 14 fatalities per year could be expected from this rule." OSHA had estimated that the new regulations would prevent eight to 13 deaths every year.

An OSHA spokesman said that because the letter was "under review," the agency would not issue an official response. But the letter caused an uproar among lower-level agency employees and was posted on Labor Department walls, union sources said.

The letter was leaked by Labor Department officials and obtained by The Journal of Commerce.

"I am totally against weakening the regulations," said Arnie Paul, president of the Portsmouth, N.H., Metal Trades Council, which represents workers at the large naval shipyard there.

Ship construction and repair work is extremely hazardous because employees frequently work in enclosed spaces and are exposed to dangerous levels of gas, asbestos, fuels and cleaning agents, Mr. Paul said.

"You've got every solvent you can imagine in those shipyards," he said.

Members of the Shipbuilders Council of America participated in the rule- making on extending the health standards to the maritime industry, said Frank Losey, the council's general council.

Because shipyard workers are confined in small spaces, "this means a higher rate of respirator use, which doesn't lend itself to technological improvements," Mr. Losey said.

"That is an economic factor that would have more significant impact on shipyards than other industries," he added.

But the organization had no position on the OMB arguments that regulations could damage the health of workers, Mr. Losey said.

The OMB letter is likely to lead to further scrutiny of the Bush administration's regulation policies in Congress. Over the past year, leading Democrats have accused the president's Council of Competitiveness of intervening in the regulation process to favor business. The council is chaired by Vice President Dan Quayle.

Sen. John Glenn, D-Ohio, has introduced legislation that requires the council and the OMB to disclose all their written and oral communications with business concerning regulations.

"These discussions should be done in the sunshine, so Americans have confidence in the regulatory process," an aide to Sen. Glenn said.

Several unions are thinking of filing lawsuits if the Labor Department follows the OMB directive and fails to extend the standards.