RATIONALE: Drugs used in chemotherapy use different ways to stop tumor cells from dividing so they stop growing or die. Radiation therapy uses high-energy x-rays to damage tumor cells. Combining surgery with chemotherapy and radiation therapy may kill more tumor cells and prevent recurrence of the cancer.

PURPOSE: Phase II trial to study the effectiveness of surgery with or without chemotherapy and radiation therapy in treating patients who have stage I rectal cancer.

OBJECTIVES:

• Determine the overall, disease-free, and colostomy-free survival rates in patients with stage I rectal cancer treated with local excision with or without adjuvant chemotherapy and radiotherapy.
• Determine the local, regional, and distant recurrence rates in patients treated with these regimens.
• Determine whether loco-regional recurrences after local excision can be successfully salvaged with radical surgery with or without adjuvant therapy for permanent cure in patients treated with these regimens.
• Determine whether the analysis of certain histological and molecular markers can help determine prognosis in patients treated with these regimens.
• Determine the anorectal, urinary, and sexual function effects in patients treated with these regimens.
• Determine the non-functional treatment morbidity and mortality exclusive of anorectal, urinary, and sexual function effects in patients treated with these regimens.
• Determine the overall survival of patients with pathology exclusions undergoing local excision.
• Determine the efficacy of the current standard in detecting recurrence during follow-up, including office visits, blood tests, and proctoscopy in patients treated with these regimens.

OUTLINE: This is a multicenter study.

All patients undergo full thickness disc excision. Patients with T3 disease or positive surgical margins after surgery are removed from study. Patients with T1 disease and negative surgical margins after surgery are observed. Patients with T2 disease and negative surgical margins after surgery receive adjuvant therapy.

Beginning 42 days after surgery, T2 patients receive leucovorin calcium (CF) IV over 2 hours with fluorouracil (5-FU) IV bolus 1 hour into the infusion once weekly for 6 weeks. Beginning 2 weeks after the completion of chemotherapy, patients receive chemoradiotherapy comprising radiotherapy once daily 5 times a week for 5 weeks and 5-FU IV continuously while receiving radiotherapy. Beginning 2 weeks after the completion of chemoradiotherapy, patients again receive CF IV over 2 hours with 5-FU IV bolus 1 hour into the infusion once weekly for 6 weeks. Chemotherapy repeats after 2 weeks rest for a total of 2 courses.

Patients are followed every 3 months for 2 years and then every 6 months for 5 years.

DISEASE CHARACTERISTICS:

• Histologically confirmed adenocarcinoma of the rectum

  • T1 or T2 by physical and endoscopic exams
  • No T3 lesions by clinical or radiological exam
  • Villous adenomas or in situ carcinoma allowed without histologicalconfirmation if clinical appearance of cancer

• No multi-focal disease within the rectum at time of initial diagnosis

• No non-adenocarcinomatous rectal cancer or anal cancer

• Less than 4 cm at greatest diameter

• Less than 40% of rectal wall circumference involved

• Proximal margin no greater than 8 cm from dentate line

• No tumor fixation to the perirectal tissues regardless of size

• No malignant regional lymph node or distant metastases by clinical exam orradiographical imaging

  • No palpable perirectal lymph nodes or nodes larger than 1 cm
  • No evidence of malignant perirectal lymph nodes by endorectal ultrasound orendorectal MRI

PATIENT CHARACTERISTICS:

Age:

• 18 and over

Performance status:

• CTC 0-2

Life expectancy:

• Not specified

Hematopoietic:

• WBC at least 4,000/mm^3
• Platelet count at least 100,000/mm^3

Hepatic:

• Bilirubin less than 1.5 times normal

Renal:

• Creatinine less than 1.8 mg/dL

Other:

• Not pregnant or nursing
• Negative pregnancy test
• Fertile patients must use effective contraception
• No other prior or concurrent malignancy within the past 5 years except inactive nonmelanomatous skin cancer or carcinoma in situ of the cervix

PRIOR CONCURRENT THERAPY:

Biologic therapy:

• Not specified

Chemotherapy:

• No prior chemotherapy

Endocrine therapy:

• Not specified

Radiotherapy:

• No prior radiotherapy

Surgery:

• No prior surgery for rectal cancer including prior attempts at transanal or transcoccygeal surgical excision with unclear or positive margins
• Prior incision or operative biopsy or colonoscopic removal allowed