ANNAPOLIS, Md. (AP) _ Gov. William Donald Schaefer on Thursday lifted a gag order that barred state employees from talking about even routine state business, but he insisted it was never a gag order.

''The word gag was never used by me,'' Schaefer said. ''It was not intended as it was interpreted by the press.'' He told cabinet members Thursday to tell employees no gag order exists.

''All inquiries that deal with state business and not personal vendettas will be answered,'' he said. He didn't explain what he meant by personal vendettas.

''When you're asking about state business, you'll get answers,'' he said.

Schaefer's order, issued July 2 at a cabinet meeting, had elevated routine information to the level of state secrets.

One newspaper spent four days trying to find out who won a state-sponsored lifeguard contest. Others have had trouble getting employees to talk about a rabid dog, traffic conditions, gypsy moths and the state's beaver population.

Cabinet secretaries to clerks were under orders not to talk to legislators or reporters without permission from the governor or his press staff.

Several officials who work on drug and alcohol abuse programs canceled an appearance before a House committee because they did not have permission to speak.

Schaefer said Thursday his directive was intended to cover only press releases, which he will continue to review. He also wants to know about major announcements before they are made, he said.

The former Baltimore mayor, elected governor in 1986, began his first administration with a directive that he would announce all good news. That didn't last.

He is known for phoning or writing people who criticize him in newspapers or radio talk shows. He dropped in unannounced at the house of one critic.

The Almanac of American Politics, a reference book, says Schaefer ''may have the thinnest skin in American politics.''

Nonetheless, Schaefer was re-elected in 1990 with 60 percent of the vote.