The U.S. Fine Arts Commission yesterday gave its blessings to a massive commercial and residential development called Georgetown Plaza at the southwest corner of Wisconsin Avenue and M Street NW.

Unveiling a detailed model of the proposed $40-million project, developers got little criticism from the commission, which must approved all construction in the Georgetown Historic District.

"The general feeling is it's a pretty good project," said commission secretary Charles Atherton.

The commission, however, did not approve plans for a pair of 60-foot tall towers that were included in the block-square project. Atherton said the office buildings would stick up above the Wisconsin Avenue storefronts, interrupting the skyline.

Proposed by Western Development Corp., Georgetown Plaza would start behind the Rive Gauche restaurant, straddles the CIO canal and sweep behind the Wisconsin Avenue store fronts for a block.

Construction is scheduled to start in March and the first of the 185 housing units should be ready for occupancy late next year, said Herbert Miller, one of the developers. The remainder will be finished in 1979, he said.

The landmarks preservation commission of the National Capital Planning Commission still has to review the project, but because it conforms to existing zoning no further city approval is needed.

On both sides of Clyde's bar, the project will break through to Wisconsin Avenue, providing access to the enclosed commercial shopping plaza on the main level.

Atherton said the Fine Arts Commission rejected the developer's suggestion that the two store fronts on either side of Clyde's be torn down and reconstructed. Re-erecting the buildings is not the same as preserving them, he noted, so the developer will have to leave the fronts in place.

Atop the block of stores, a small village of townhouses is planned. The buildings would be constructed around a second-story courtyard and would be linked to an apartment complex on the southside of the canal.

The apartments will be in what is now an abandoned warehouse. Atherton praised the project for preserving the character of the warehouse.

Renovation of the warehouse into 50 two-floor apartments is scheduled to start in the spring, Miller said. When the apartments go on sale, in February, they will carry prices in the $125,000 range.

On the north side of the canal about 100 townhouses will be built not a concrete deck over the shopping area.

Two five-story buildings, with another 50 apartments also are planned. Miller said balconies and terraces will be added to present plans to soften the buildings and overcome some objections rasied by the Fine Arts Commission.

He said the developers will also redesign roof-top mechanical components to remove other objections.

The commercial space in the project is envisioned as an "international retailing" complex. Garfinckel's already has agreed to build a store there and the developers are negotiating with several boutiques.