BATON ROUGE, La. (AP) _ Malfeasance indictments against the mayor and a former top aide were dismissed Friday, three days after they were returned, the attorney general said.

William J. Guste cited legal ambiguities and no evidence of criminal intent on the part of Mayor Pat Screen and former aide Mary Olive Pierson in announcing that the felony charges would be thrown out.

''We believe that justice requires that those indictments be dismissed,'' he said.

Screen and Pierson each were indicted on one malfeasance count Tuesday following a 14-month investigation by an East Baton Rouge Parish grand jury into a road improvement program carried out during Screen's 1984 re-election campaign.

Because of the projects, the City Council was forced to shift $12.1 million to cover shortfalls in various accounts and later borrowed $2.5 million to balance the books.

In a statement, Guste said the mayor and his staff implemented the program after obtaining legal advice from the parish attorney's office. The council also approved the action, he said.

''There's no need to go any further,'' Guste said. ''We find no criminal intent on the part of the mayor and Ms. Pierson.''

Guste and special prosecutor Rene Salomon, who handled the case after a judge removed District Attorney Bryan Bush from it, refused to say whether the indictment was returned at the advice of prosecutors.

Screen had alleged that Bush was retaliating for budget cuts to his office.

Screen, who has said he is considering running for secretary of state, said he was grateful but not surprised by the dismissal.

''I've been in this business for about 10 years,'' he said. ''You catch the grease. That's the way it is and I accept it.''

Pierson praised Guste for deciding to drop the charges.

''It took a lot of courage on the part of Attorney General Guste to make the decision that was made,'' she said.

Guste said the grand jury acted in good faith, adding ''This is no criticism of the grand jury as individuals or as a group.''