Investigating a murder that has ignited racial tension in the 14th Precinct, actress Sharon Gless as Sgt. Christine Cagney walks into the squad room and addresses the other cops.

Cagney: "Okay, listen up all you crackers, wops, niggers, chinks, spics, micks, kikes and Polacks. Did I leave anybody out? Good, because that's the last time I want to hear those words in this place."

A black detective (derisively); "Thank you, Judge Cagney. What do you know about names that can cut? You like to be called a spoiled honkie bitch? Does that measure up to gook, Hebe or coon?"

Even for Cagney & Lacey, the CBS series that has courted controversy with shows on abortion, alcoholism and teen sex, its episode this week, The City Is Burning, is a scorcher, using language that is anathema to prime time. The explosive script was inspired by a notorious racial incident last December in Howard Beach, a quiet Queens neighborhood in New York City in which a group of white teenagers allegedly attacked three blacks, chasing one of them to his death on the highway, prompting outrage that has yet to die down. In The City Is Burning a black youth is killed in an all- white neighborhood, and the murder weapon is traced to a white policeman in Cagney and Lacey's precinct. Earlier this month, fearing the show would bias the jury, lawyers for the Howard Beach defendants tried to have the episode banned from airing in New York. The motion was rejected, but a point was made; The City Is Burning is generating an extraordinary degree of heat.

The program's intention, says writer Samm-Art Williams, is to dramatize how "pressure forces even good cops to face their subconscious racism in the squad room." Their bigotry is revealed through language-not Archie Bunker-type euphemisms, but the ugliest ethnic epithets in the vocabulary. "Those words can get pretty raw, but it's reality," says Williams, who made no attempt to soften his final draft for the network censors. "We decided to go for it and let the censors do their job." The censors, however, kept their hands off. "CBS did not ask us to change a word," says executive producer Barney Rosenzweig. "It was very clear to them what the point of the show was."

Convincing the cast was another matter. Hurling the insults "was difficult for all of us, and it was gratifying that it wasn't easy," says Tyne Daly, who plays Detective Lacey. Married for 21 years to black actor-director George Stanford Brown, Daly adds, "If I never hear those words in my life again, it's not enough. They should be gone from the lexicon." In one emotionally charged scene, Paul Mantee (Detective Corassa) and Carl Lumbly (Detective Petrie) had to call each other "guinea" and "nigger." Normally friends, the actors felt a barrier rise between them. "I had a lot of trouble getting that word [nigger] out," says Mantee. "Every time we did that scene, we would walk off in different directions. I didn't want to see him, and he didn't want to see me." The two have reconciled, but Lumbly still remembers the pain. "This episode," he notes dryly, "was not a great deal of fun."

Because of the sensitive subject and the passions it provokes, Cagney & Lacey's all-white writing team turned to outsider Williams, 41, a black actor and playwright, to craft the script. Best known for his 1980 Tony-nominated Home, Williams is a story editor on the new CBS series Frank's Place. "Sam had a passion and power that we liked," says Cagney & Lacey's supervising producer, Jonathan Estrin. He also brought an uncommon sense of proportion to the sensational topic.

"There had to be a balance all across the board," says Williams, a bear of a man who stands 6'6" and weighs 275 lbs. "Everybody has human faults, regardless of color. I tried to show both sides. Because I'm black, I don't have to take the black characters' side. Because I have white friends, I'm not obligated to take the white characters' side. It makes no difference what color the person is you're writing about. If it's an American story, I can write it."

Born in Philadelphia but raised in the rural community of Burgaw, N.C., Samuel Arthur Williams (he changed his name because another Sam Williams was registered with the Screen Actors Guild) grew up in an area suffused with racism but relatively free of racial incidents. "It's different in rural areas," he says. "Everybody farms, everybody eats the same thing."Still, segregation was everywhere. "We drank water from separate fountains, we went to separate churches and separate schools" says the playwright, who was raised by his mother, a high school drama teacher, after she divorced his father, a salesman. "The bad part about segregation is that you always got secondhand books, secondhand whatever. It makes you feel secondhand. But after a while you begin to think it doesn't matter how the cover of a book looks as long as you can read it. You knew you were in a position you had to rise up from. You had to work harder or you'd never get out."

Active in civil rights groups while studying political science and psychology at Maryland's Morgan State University, Williams has always taken the positive approach. "You don't intimidate anybody by saying there are not enough blacks on TV," he says. "Standing on someone's desk and screaming, 'Racism!' is not going to get the show on. You have to come in with a plan."

A pragmatist, Williams has expressed himself through his work. He's acted with New York's Negro Ensemble Company and has appeared as Jim in the PBS production of Huckleberry Finn. In addition to writing 15 plays, which include Eyes of the American, Williams also won an Emmy nomination for NBC's Motown Returns to the Apollo. Divorced in 1973 after a two-year marriage, he lives alone in a two-bedroom Los Angeles apartment.

Williams hopes The City Is Burning will show that "there is racism and hatred in the world, but there is also a lot of love." Yet he and all those connected with the show know that one television episode, no matter how powerful, is not going to eradicate the problem of racism. "People pay attention to TV," Says Tyne Daly, "but they should be paying more attention to their politicians, ministers and philosophers. I don't aggrandize what we've done here. We're not curing racism. I though we would never have to make another movie like this. My God, didn't we cover this all before?"