NASHVILLE, Tenn. (AP) _ A federal judge dismissed mail fraud charges on which former Gov. Ray Blanton was convicted and sentenced to prison in a 1981 liquor license conspiracy trial.

U.S. Judge Bailey Brown on Thursday upheld an extortion and conspiracy charge against Blanton, but threw out all charges that also sent two of his former aides to prison.

Citing a 1987 decision of the U.S. Supreme Court, Brown dismissed mail fraud and conspiracy charges against Jim Allen, Blanton's 1974 campaign manager, and Clyde Edd Hood, a former special assistant who died last month of injuries sustained in a farm accident.

The action cleared Allen and Hood completely; Brown ordered $14,000 fines refunded to Allen and Hood's widow, Betsy.

The three men were convicted of a scheme to have the state Alcoholic Beverage Commission award 12 suburban Nashville liquor licenses to friends of Blanton in 1976. The indictment alleged that 67 different pieces of mail were sent in furtherance of the scheme to defraud.

''I'm particularly happy for Edd's wife and children that this ordeal is over,'' said Hood's lawyer, William R. Willis. ''Some of the elation ... is greatly diminished in that Edd died before he could know that his name had been cleared.''

Tyree Harris, Allen's attorney, said he was happy that Allen's fine would be refunded, but said his client had served time in prison. ''There's no way he can get that back,'' Harris said.

Allen served two years in prison and Hood eight months.

Blanton and Allen have unlisted telephone numbers and could not be reached for comment.

Blanton, governor from 1975 to 1979, was fined $11,000 and served two years of a three-year prison sentence. He received a year off for good behavior in 1986.

The judge ordered no refund of fines to Blanton, but Blanton's lawyer, John McLellan, told a reporter that he would pursue this along with efforts to remove the extortion conviction.

Bob Lynch, the U.S. attorney who prosecuted the case, said the U.S. Supreme Court ruling that set up stronger guidelines for mail fraud ''pretty well made me anticipate this.''

The high court said the federal mail-fraud statute is designed only to protect money or property rights and may not be used to prosecute someone for violating ''the intangible right'' of citizens to good government.

The ruling also was cited Nov. 12 by a federal judge who threw out convictions of former Maryland Gov. Marvin Mandel and five co-defendants in a bribery case.