Just when a skirmish with a Louisiana brewery was threatening to become a full-blown beer battle, the Texas Alcoholic Beverage Commission has thrown in the towel. Effective today, Dixie Blackened Voodoo Lager Beer is no longer contraband in the Lone Star State.

Beverage officials banned the New Orleans brew in January because, they said, its name and label, which shows a swamp, conjure images of witchcraft and the occult. But on Wednesday, faced with legal questions, a retaliatory ban on a Texas beer and widespread ridicule, the regulators changed their minds.

"We have talked with our attorneys and are reluctantly approving the beer because of lack of legal grounds to deny it," said Randy Yarbrough, the commission's assistant administrator. "A lot of people think we were being silly, but we still feel like the voodoo connotation is not in good taste and not in the public interest." A 'Need to Loosen Up'

Kendra Bruno, owner of Dixie Brewing, the New Orleans company that makes the beer, said the name was simply "to get people's attention." She said the silvery-blue label, which shows cypress trees hung with moss and glowing animal eyes, reflects her love of Louisiana bayou country. "We never intended anything negative or occult about it," she said. "Those Texas beverage guys need to loosen up."