Some 14 months ago, faced with a desperate absence of business for existing stores and little hope that construction could begin soon on the final section of controversial Waterside Mall in Southwest Washington, the developer said he was prepared to throw in the sponge.

Bresler & Reiner Inc., the Washington firm responsible for a mall that never succeeded at 4th and M Streets in the city's "new Southwest," submitted plans to the D.C. government to end construction as it was, without completing projected wings.

Yesterday, developer Charles Bresler was able to tell reporters that a long impasse over future construction plans had been broken and that an additional 200,000 square feet of office and retail space will be added, after all.

A major roadlock to such expansion apparently has been hurdled with a promise by the Washington metropolitan Area Transit Authority to remove subway construction equipment from in front of the mall by Sept. 15.

Although similar Metro promises have been made in the past, Bresler expressed optimism yesterday that the new vow will stick. Waving a letter from Metro General Manager Theodore Lutz, listing the Sept. 15 date, Bresler said "five years on construction on the mall plaza will end and we will complete new north and south wings . . . we hope this will help to revitalize the commercial area in Southwest."

Since December 1973, the M Street main mall entrance has been blocked by Metro construction. Retailers at the mall - many of whom closed their stores - complained that pedestrians stayed away because of the subway building. Deliveries of merchandise also were hampered by the construction.

Waterside Mall was planned as the major commercial center in the Southwest residential urban renewal area, to serve more than 20,000 residents - a mixture of relatively affluent residents in new apartments and town houses as well as lower-income and public housing residents.

The mall was built in 1961 and the acquired by Bresler & Reiner in 1964. Bresler said construction of the two new wings would begin as soon as Metro vacates the property and building permits are obtained from the D.C. government. With full subway service to the area planned in the early 1980s, Bresler said he thinks he will be able to attract tenants for the offices and stores.

A major tenant for the mall's new space will be Safeway Stores Inc., to be housed on the entire first floor of one wing, off M Street at the mall's southest corner and adjacent a subway station.

Safeway will lease 31,000 square feet and Bresler & Reiner will offer office space for lease on two floors above. In a new north wing, Bresler said another 30,000 square feet will be available to retailers in addition to two more floors for offices.

The new Safeway will replace a smaller store, opened in 1960, around which the mall was developed. Unlike the older unit, the new supermarket will include specific parking areas and package pickup service. With a retail space more than double the current location, Safeway plans to expand its lines of food and non-food merchandise.

According to Safeway spokesman Ernest Moore, preliminary plans call for use of a heat recovery system - whereby heat generated by the refrigeration system is used to heat the building and its hot water supply, reducing energy requirements.

Other features to be included are a special service counter for the sale of appliances and electronic equipment, a bath and accessories section, cosmetics, reading center and smoke shop.

A wide checkout aisle and reserved parking will be designed for handicapped customers, Moore added.