CHOTEAU, Mont. (AP) _ A conservation group working to preserve grizzly bear habitat is battling suspicion and rumor among ranchers and other residents over a purchase of 20,000 acres of land that made it one of Teton County's largest landowners.

''We worry that what they've done is build a grizzly bear farm,'' said Glenna Peebles, who recently sold some ranch property to the Conservancy. ''Maybe they haven't, but there's a lot of misunderstanding.''

The giant bears, which ranchers accuse of killing livestock, are listed as threatened on the federal endangered species list.

The locals complain about rich outsiders, fears the land will be taken off tax rolls and the plans of The Nature Conservancy, a national nonprofit organization that specializes in buying land to protect unique or endangered plant or animal communities.

The Conservancy land varies from scattered jack pines and alpine forest to a vast swampy area along the Teton River in northwestern Montana, on the eastern slope of the Rockies outside the Bob Marshall Wilderness Area.

The area attracts grizzlies from the mountains of the nearby wilderness and national forests in the late summer to feed, especially in dry years when the swamp has the best supply of berries.

The group, which depends on donated money, acquired the land over the last 10 years in scattered large and small pieces for a total of $5 million. In spite of Peeble's worries, it continues to lease part of the land for cattle grazing and hay growing.

''We're letting outside people come in and buy Montana land,'' complained Sally Haas, a Choteau dude ranch outfitter. She and her husband Al lost their dude ranch lease on part of the property last winter.

''The locals never did like 'em,'' said rancher Bert Guthrie. ''We all thought it was to be a sanctuary for the idle rich.''

Those allegations are hotly denied by Bob Kiesling, Montana director for The Nature Conservancy. He dismisses much of the local criticism, saying ''gossip is the nature of small rural communities.''

He is frustrated with ''gossip being treated like gospel by small-minded people,'' and says he spends much of his time trying to dispel the rumors.

''We're not Easterners using Arab oil money to lock up the land,'' he said. ''I was born and raised in Havre, Montana. I'll tell you what else we aren't: we're not a communist front. We're not part of a government conspiracy to take over Montana. And we do pay our taxes.''

Some locals are suspicious of the Conservancy's role and its long-term intentions.

''They've put together a lot of property with a design in mind, I'm sure of that,'' said Teton County Commissioner Brad DeZort.

''You get people from the East who want wilderness everywhere and we're trying to walk the middle of the road here,'' he said. ''We won't let anybody rape the land, but we've already got 83,000 acres of wilderness in the county and we believe we can have them both - wilderness and development.''

DeZort worries that at some point the group's non-profit status might enable it to win tax exemptions in the county, which covers over 1,450,000 acres.

Kiesling, who lives in Helena 100 miles south of this community of 1,700, insists The Nature Conservancy ''has and always will pay taxes. What we're doing is in the best tradition of American free enterprise. We buy the land and manage it well and pay our taxes.''

He concedes his organization has made a mistake by failing to have a ''solid community relations program.''

''But instead of listening to the rumors and passing them off as fact, why can't people just pick up the phone and call us?'' he asked.

One recent rumor was that the Conservancy was preparing to give the land to the state as a centennial gift, thereby taking it off the tax rolls.

''It took us too long to get that corrected but people are treating it as the truth when it's not,'' Kiesling said. The Conservancy does sell some of its acquisitions at the purchase price to governments for parks or preserves.

Guthrie worries about continued local access to the land, something Kiesling said is a ''major problem with misinformation.''

''All we ask, like any landowner, is that people ask permission before they come on,'' Kiesling said.

And Kiesling, who calls the 8,000- to 10,000-acre Pine Butte Swamp Preserve within the Conservancy property swamp a ''biological treasure trove,'' said visitors ''drop money with the residents of Choteau, so I don't see where we're hurting the local economy.''