CINCINNATI (AP) _ A General Electric Co. executive removed from his job as boss of the company's industrial diamonds division accused GE in a lawsuit of conspiring with a South African cartel to fix the price of industrial diamonds.

Edward J. Russell of Dublin, Ohio, filed suit Tuesday in U.S. District Court accusing GE of conspiring with the De Beers diamond cartel to fix prices of industrial diamonds on the world market.

Russell, 54, alleged in the suit that GE fired him because he protested and tried to stop GE meetings with De Beers leaders.

In Washington, the Justice Department said today it is investigating whether price fixing occurred in the sale of industrial diamonds, which are used in cutting and grinding tools. Gina Talamona, spokeswoman for Justice's antitrust division, declined further comment.

GE today denied Russell's allegations and said he was fired because his Superabrasives division did not make profit expectations during his two years of running it. But, GE also said it was beginning an internal investigation and would fully cooperate with the government's investigation.

Asked why GE is just now starting the investigation, GE spokesman George Jamison said, ''Essentially, I guess, because of the suit. It would be because of this lawsuit.''

Russell said in his lawsuit that he repeatedly received excellent work evaluations from his superiors and that his division annually exceeded GE's multi-million-dollar profit expectations.

His lawsuit said that Russell learned of GE meetings with leaders of the De Beers cartel and repeatedly protested those contacts, saying they could violate U.S. antitrust law. He said his boss, Glen Hiner, former head of GE's plastics business, secretly met for three years with De Beers leaders despite Russell's protest.

John F. Welch Jr., GE's chairman and chief executive officer, was aware of the meeting and was interested in seeing what developed, Russell said in his lawsuit. Hiner met with De Beers personnel in London from 1989 through 1991, Russell alleged.

''It's outrageous that anyone would suggest that Mr. Welch either knew of, or was involved in, any sort of antitrust activity,'' GE's Jamison said.

Hiner is now chairman and chief executive officer of Owens-Corning Fiberglas Corp. in Toledo, Ohio, a job he took last December. Hiner did not return a telephone call to his office today. Hiner was the GE executive who fired Russell.

Russell alleges that GE fired him on Nov. 11, 1991, as vice president and general manager of its Superabrasives division, based in Worthington, Ohio.

Jamison said that Russell is still on GE's payroll as the company helps him try to find another job. Russell has talked to GE employees in efforts to improve his severance package and has expressed anger about his removal from the Superabrasives job, Jamison said.

Russell's lawsuit is assigned to U.S. District Judge Herman Weber in Cincinnati. Russell's lawyer, James Helmer Jr., said he hopes the case can go to trial in 15 months.

Helmer filed the lawsuit in Cincinnati because GE's Aircraft Engines group is based in suburban Evendale and uses GE's industrial diamonds in making jet engines.