NASA has taken the unusual step of issuing a formal denial of a report that thieves made extensive use of computers to obtain free telephone service through the Johnson Space Center.

The Houston Chronicle reported Wednesday that hundreds of people used the illegal system during a two year period with losses possibly reaching $12 million, based on costs of similar computer break-ins nationwide.But the National Aeronautics and Space Administration issued the denial, saying the actual loss was far less.

"It's simply not so," said NASA spokesman Brian Welch. "There is no universe you can find in which this set of math will hold up. The entire federal telecommunications charges for the Johnson Space Center average about $3 million per year.

"That means it's impossible anybody could have abused the system to the tune of $12 million over two years. It's just not possible."

Welch said NASA records indicate long-distance charges at the space center average about $25 per employee per month. He called reports about massive fraud "an extraordinary exaggeration."