WASHINGTON (AP) _ National Endowment for the Arts funding for a performance in which an HIV- positive artist drew his own blood on stage was ''grossly improper,'' two senators say.

Sens. Robert Byrd, D-W.Va., and Don Nickles, R-Okla., warned NEA chairwoman Jane Alexander in a letter that the Minneapolis performance could endanger the agency's budget when it comes up for review later this year.

Byrd and Nickles, the chairman and ranking Republican of the Senate Interior subcommittee that oversees the agency's budget, said NEA funding for fiscal 1995 was ''in serious jeopardy'' unless the agency institutes safeguards to prevent support for ''such grossly improper activities.''

Funding for the agency causes a yearly battle in Congress, as conservatives try to eliminate or cut the budget on the grounds that the NEA provides grants for art that is obscene or violates traditional values.

The senators, citing an article in The Washington Post, said body artist Ron Athey, who is HIV-positive, drew blood from his scalp with needles and stuck his arm with acupuncture needles during a March 5 performance at Patrick's Cabaret, sponsored by the Walker Art Center in Minneapolis.

Athey also carved a design into the back of another man, blotted the results with paper towels and hoisted the bloodied print on a clothesline above the audience.

Several people in the audience fled, knocking over chairs in their haste to move from beneath the clothesline, the Post reported.

But the Walker Art Center has disputed reports of panic in the theater, saying 80 of the 100 people stayed for a post-performance discussion. The theater has said the man whose back was cut was not infected with the AIDS virus and that local health officials have confirmed there was never any health risk to those in the audience.

''It's really outrageous when one performance is used to overshadow the extraordinary programs that this agency has helped put into place,'' said Cherie Simon, the NEA's director of public affairs.

She said the agency gave Walker, one of the nation's most prestigious art centers, a $104,500 grant this year and that support for Athey's performance probably amounted to between $100 and $150.

But the senators said it was ''unconscionable that the NEA would fund and condone such a performance, especially when the health of the audience members is put at risk.''

''Congress has a responsibility to take the federal government to task when it fails to uphold the public's safety,'' they said. ''In this case, the public should be able to expect to attend a publicly funded performance without being exposed to HIV-infected blood.''

The senators cited past grants for the sadomasochistic and homosexual photos of Robert Mapplethorpe and an Andres Serrano photo of a crucifix submerged in urine as examples of programs that shouldn't have been funded.

Last October, Congress passed a $170 million budget for NEA for fiscal 1994, $4 million less than the administration wanted.