MIT faculty members this week expressed concern that a proposed multimillion-dollar biomedical research facility affiliated with the school might lead to conflict of interest and other academic problems.

Edwin C. Whitehead of Greenwich, Conn.--who is the largest stockholder of Revlon, Inc.--has offered to fund an independent facility called "The Whitehead Institute for Biomedical Research" and staffed by MIT scientists.

His grant to establish the institute would total $127 million.

Whitehead and MIT officials have called the proposed arrangement unique among American universities. In the past few years, other major universities have also considered arrangements to take advantage of the rapidly expanding--and lucrative--field of biotechnology.

Last fall, Harvard rejected an offer to become a minority shareholder in a proposed genetic engineering company in which a Faculty member was to play a major role.

Whitehead wants to provide $20 million to build a 10-story building in Cambridge and $5 million a year to operate it, Robert Byers, an MIT spokesman, said yesterday.

Before his death, Whitehead would replace the trust with a $100-million endowment to fund the institute, Byers said. All of the money would go to the facility and not to MIT, Byers added.

However, MIT would receive an endowment of $7.5 million to provide money for "unforeseen costs" Byers said.

In a letter sent to faculty members this week, Francis Low MIT provost, said there were "some difficulties" in the arrangements; but he concluded, "The benefits definitely outweigh the potential problems of going ahead."

Low and other proponents of the new institute argued at a faculty meeting Wednesday that the arrangement would add to MIT's prestige as a world center for biological research.

But critics questioned whether scientists who work at the institution might receive special consideration in tenure decisions or might feel more allegiance to the institute than to MIT.