The state's environmental agency will begin hearings today to decide whether a diesel power plant Harvard is building could cause cancer when operating.

The cancer debate is the last hurdle for Harvard's Medical Area Total Energy Plant (MATEP), a $260 million facility in Boston that has met vigorous opposition from the community since construction began seven years ago.

"This is probably the last act in the drama," said Verne W. Vance, the lawyer who will represent Harvard at the set of hearings expected to last until mid-October.

Vance and opposing lawyers for the neighboring communities of Brookline and Mission Hall will call on a series of medical experts to predict the carcinogenic or mutagenic effects of the plant, the largest facility of its kind in North America.

"The plant itself is unprecedented," said Harvard spokesman David M. Rosen, "I don't think there's ever been a proceeding like this."

Hearing Officer Ellyn Weiss will report the findings of the hearings to the state's Department of Environmental Quality Engineering (DEQE). A final decision from DEQE may not come until late next year, officials predicted.

The plant was originally designed to supply the total energy needs of Harvard's medical area through a process called cogeneration, whereby diesel exhaust is used to make steam.

But the ongoing legal battle has prevented the plant from ever operating at full capacity and increased more than ninetold the plant's projected $30 million cost.

Even if the plant wins approval from the state on the cancer issue, Harvard will have to conduct an extensive number of tests of the giant diesel engines that could mean the plant wouldn't become fully operational until 1985.

The steam and chilled water portions of the facility have supplied limited amounts of power for three years.