WASHINGTON — The Environmental Protection Agency ignored scientific evidence and agency protocols to set limits on mercury pollution that would line up with the Bush administration's free-market approaches to power-plant pollution, according to a report released yesterday by the agency's inspector general.

EPA staff were instructed to set modest limits on mercury pollution, and then had to work backward from the predetermined goal to justify the proposal, according to a report by Inspector General Nikki Tinsley.

Mercury is a toxic metal released as a byproduct by coal-burning power plants and other industries, and it is known to have a number of harmful health effects, especially on young children and pregnant women. The proposal in contention was issued by the agency in December 2003 to clamp down on pollution by mercury.

Tinsley called for an "unbiased" overhaul of the plan, even if it meant delaying the rule beyond next month, when it was to be finalized.

Agency officials said yesterday that Tinsley did not understand the science and limitations of mercury control, disputing her charges that the proposal was politically biased or scientifically unsound. An agency spokeswoman said she expected the final mercury rule to be released next month on schedule.

Two agency staff members, however, said the report accurately described the pressures placed on staff by political appointees.

"I don't think anyone has ever seen as much political influence in the development of a rule as we saw in this rule," said one EPA staff member who attended meetings between administrators and staff. "Everything about this rule was decided at a political level. ... The political level made the decisions, and the staff did what they were told."

The agency's plan made clear that the EPA preferred to regulate mercury in a manner similar to the proposals in President Bush's "Clear Skies" legislative initiative, which has been bogged down in Congress. This cap-and-trade approach calls for a system whereby polluters must meet collective pollution-control targets, but can trade credits so that not all plants must meet the same standard. It aims for overall reductions in mercury of about 29 percent by 2010, and a total reduction of 70 percent by 2018.

Industry welcomed the proposal, which involved lower costs and less-burdensome regulations.