WASHINGTON (Reuters) - The Agriculture Department's plan to define organic food may be challenged in court for ignoring the recommendations of an organic- industry panel created by Congress, a panel member said Monday.

The USDA's proposed organic rules, issued last December, unleashed a tidal wave of criticism from organic farmers and consumers for allowing the use of genetically modified seeds, human sewage sludge as fertilizer and irradiation.

Some organic farmers contend the proposed rules are designed to accommodate agribusiness interests, which are eager to expand into the fast-growing $3.5 billion organic industry by using technology and cheap fertilizers.

To date, more than 23,000 individuals and organizations have commented on the proposed rules, a record for a USDA rulemaking. The size of the response virtually guarantees that no final rules will emerge in 1998, according to industry officials.

"We feel that we have statutory authority over certain organic food standards and that the USDA has overstepped its authority," Kathleen Merrigan, a member of the National Organic Standards Board, said.

Merrigan said the board, created by Congress in 1990 to create a list of farming practices that constitute organic production, would send a letter to Agriculture Secretary Dan Glickman urging him to "come to terms about how this whole decision-making process will be."

The board contends that the USDA cannot add to or delete from the panel's list of acceptable practices.

If the USDA does not ban the use of sewage sludge, irradiation and gentically altered seeds to match board standards, "I imagine there will be litigation filed," Merrigan said in an interview.

But some agribusiness officials contend there is no scientific basis to exclude genetically modified seeds or irradiation. Organic food makers themselves sometimes use tiny amounts of soy oil from genetically altered soybeans to preserve a food.

The controversy over the proposed rules resembles "the fervor of believers engaged in a holy war against the USDA," Regina Hildwine, a lobbyist for the National Food Processors Association, said.

The organic rules are intended to be used solely for marketing and labeling by the industry and are not a consumer issue, she said. "Organic does not mean safer," Hildwine said. "Organic does not mean healthier."

The USDA has assigned a half-dozen employees to analyze the public comments, which can be submitted until April 30.

Glickman said that after the USDA completed its analysis, the department would probably publish another proposed rule to give organic farmers, consumers and the agriculture industry a chance to comment again.

"This issue has taken on significant complexity and public interest, so we have slowed down the process to make sure we do it the right way," the agriculture secretary told reporters.

The USDA said its proposed rules did not endorse the trio of techniques that were so strongly opposed by organic farmers and it was simply gathering public comment on the controversial issues. The department has been an advocate of biotechnology to expand the yield and quality of soybeans and other products.

The organic industry asked the USDA years ago to create national standards for organic foods, which would eliminate a patchwork of some three dozen state and private-sector rules.