A New York Appellate Court decision has paved the way for grand jury testimony tomorrow by a former private investigator who questioned two suspects in the 1975 Martha Moxley murder.

On Friday, the New York Supreme Court's Appellate Division denied a motion by suspects Michael and Thomas Skakel that sought to block testimony of Willis Krebs, who had been hired by the Skakel family to investigate the 15-year-old Greenwich girl's death.

Connecticut prosecutors have said Krebs' testimony is needed because the Skakel brothers significantly changed their alibis for the night of the Oct. 31, 1975, murder when interviewed by Krebs. Prosecutors have further alleged the revised stories either place the Skakels with the victim or near the crime scene at about the time Moxley was slain with a 6-iron from a set of golf clubs owned by the Skakel family.

Krebs had not contested the subpoena, but Skakel attorney Robert Gottlieb intervened with a motion to quash the order. He claimed Krebs, now an investigator with the Suffolk County, N.Y., district attorney's office, had worked on behalf of Skakel defense attorneys and therefore his interviews of the brothers were protected by the attorney-client privilege.

The motion to quash was denied earlier this month by a Suffolk County judge. On March 15, Gottlieb applied with the New York Supreme Court Appellate Division for a stay on the county judge's ruling, pending an appeal. That application was denied without comment by an appellate division four-judge panel on Friday, a court clerk said yesterday.

State Inspector Frank Garr, the lead Moxley case investigator, yesterday said Krebs is expected to appear before the grand jury in Bridgeport tomorrow, along with Michael Skakel's former defense attorney, Thomas Sheridan Jr. Sheridan in 1992 hired the private investigation firm Krebs then worked for, Sutton Associates of Jericho, N.Y., to probe the Moxley murder in preparation for a possible defense.

In an affidavit filed in conjunction with the earlier motion to quash the subpoena, Krebs stated that he had interviewed Thomas Skakel twice and Michael Skakel once. The affidavit stated: "At the time of my investigation in the (Moxley) case, I was an employee of Sutton Associates. . I always participated in these conversations with the understanding that these conversations were strictly confidential and protected under the attorney-client and work product privileges."

Sheridan's grand jury testimony is being sought to clarify the relationships between the private investigations firm, the Skakels and the suspects' attorneys. Late last year, a Manhattan judge upheld a subpoena ordering Sheridan's grand jury appearance, saying that since his testimony is being sought in Connecticut, the question about attorney-client privilege should be determined in Connecticut.

In similar court proceedings in Nassau County, N.Y., Gottlieb successfully blocked a grand jury subpoena that had been issued to Sutton Associates President James Murphy. In January, Judge Jerald Carter ruled he would not enforce the order not because of a claimed privilege, but because Murphy had not personally interviewed either Skakel brother and therefore was not a material witness.

But in that same ruling, Carter said hearings he presided over had established that two other Sutton Associates investigators - including Krebs - "are witnesses with firsthand knowledge of the alleged Skakel interviews."

The grand jury investigating the Moxley murder was appointed last June. Superior Court Judge George Thim, who is serving as the one-man grand jury, has not heard testimony since Feb. 1, when author Richard Hoffman testified about a book he was to have ghost-written for Michael Skakel.