WASHINGTON (AP) _ The nation over-regulates methadone, a chemical that helps heroin users kick the addiction, to the point where they are not helped and society suffers, the Institute of Medicine reported Wednesday.

Methadone is a Food and Drug Administration-approved chemical given to wean addicts off heroin because it weakly imitates that illegal drug.

But fear that methadone, itself an opiate, would be abused led the government to restrict its use to specially licensed doctors in special clinics, the only drug so limited. States then added more restrictions - some even banning methadone.

While an estimated 115,000 people are receiving methadone, critics say only 20 percent of addicts have access to the treatment.

So the Institute of Medicine convened drug experts to study the issue. Wednesday, the panel concluded methadone can significantly reduce illegal drug use and related crime and AIDS infection, yet is hampered by over-regulation.

''Current policy ... puts too much emphasis on protecting society from methadone and not enough on protecting society from the epidemics of addiction, violence and infectious diseases that methadone can help reduce,'' the report said.

It urged the Department of Health and Human Services to relax methadone restrictions and force each state to follow the same rules. Among the recommendations:

-Doctors should be allowed to prescribe whatever dose of methadone is necessary for individual patients, instead of the narrow dose federal regulations set.

-Methadone patients should be allowed to continue treatment if they are hospitalized. Now hospitals often refuse to give methadone, abruptly interrupting patients' treatment and causing withdrawal.

-Pregnant addicts should be quickly treated with a full course of methadone, as there is no evidence that methadone is toxic to the fetus, while heroin is.

-Doctors should decide if addicts are appropriate methadone candidates, how long to give the drug and when patients can take methadone at home instead of in a clinic. Now, the government provides what the panel called an arbitrary checklist to decide that.

-One agency should license and inspect methadone clinics, which now undergo numerous lengthy inspections by separate agencies that require different paperwork.

But the long-awaited report won't help most heroin addicts because they'll still have to await openings in overcrowded methadone clinics, said Dr. Robert Newman, president of New York's Beth Israel Medical Center, who helped develop early methadone programs in the 1970s.

He contends all DEA-licensed physicians should be able to prescribe methadone just as they can prescribe every other medicine, so addicts can get help from more than just a handful of doctors.

''The 200 million Americans who are not heroin addicts are paying the price in crime, prisons, the cost of caring for addicts with AIDS and tuberculosis when these people can't get treatment,'' he said.

The institute presented its report to federal health officials last week, but they had no immediate comment.