The Harvard Medical School psychiatrist accused of driving a patient to suicide after having an affair with him defended her handling of the case yesterday, saying she was trying to help a mentally ill student who had suffered "horrendous childhood abuse."

Dr. Margaret H. Bean-Bayog '65, in a statement issued through her lawyer, again denied charges that she used inappropriate treatment methods or that she had sex with her patient.

Bean-Bayog, who is assistant professor of clinical psychology, filed the statement just hours after a state medical board decided to allow her to continue practicing but only under the supervision of another psychiatrist.

For the first time since coming under fire for her care of 28-year-old Paul Lozano, Bean-Bayog released a detailed explanation of her treatment of the fourth-year Medical School student.

Lozano's family claims Bean-Bayog lured the man into an affair, made him pretend to be her 3-year-old child and caused him to become suicidal. The family has filed a malpractice and wrongful death suit against the psychiatrist.

Lozano sought Bean-Bayog's counseling while studying at Harvard Medical School between 1986 and 1990. He killed himself with a cocaine injection in Texas last April three months before he would have graduated.

The Medical School placed Bean-Bayog on administrative leave and removed her from all referral lists last May after learning that a complaint had been filed.

The state Board of Registration in Medicine ruled early yesterday that Bean-Bayog engaged in "substandard care" but decided not to revoke her license pending further investigation.

State Consumer Affairs Secretary Gloria Larson, who oversees the medical board, said she called the emergency board meeting because she was concerned that the regulatory panel was not acting fast enough on the complaint.

Neither the Lozano family nor its attorney could be reached reached to comment on the board's decision.

In a document filed with the board yesterday, Bean-Bayog denied that she deviated from applicable standards of care in her treatment of Lozano.

Her attorney, Michael L. Blau, emphasized thatthe board found no evidence that she engaged insexual misconduct or that her treatment causedLozano's death.

Bean-Bayog said Lozano "harbored homicidal,violent, and delusional thoughts" and "manypsychiatrists would not have even attempted totreat him."

The board alleged that she used unconventionalmethods to treat Lozano--that she aided his beliefthat she was his "mom," and that she wrote"explicit fantasies that may have related to him."

Bean-Bayog acknowledged that her treatment was"unique and somewhat unconventional" but said itwas appropriate because Lozano was so severelydepressed.

She said the sexual fantasies made public bythe Lozano family were dreams that she hadrecorded in private and were never meant to beseen by Lozano. She said Lozano broke into heroffice and stole her personal papers along withhis medical records.