The government will decide within a few months how to change the nation's paper currency to foil counterfeiters, but has dropped the idea of pastels or other colored money.

U.S. Treasurer Katherine D. Ortega said yesterday the color, size, back, portraits and borders of the currency will remain the same, but parts of the face will be redesigned.

The one-dollar bill is the least likely to be counterfeited, and Ortega, who outlined the Treasury's plans for a House Banking subcommittee, said Treasury Secretary James A. Baker III may decide to leave it as is when he approves the currency changes.

The sections of the paper currency being changed are the areas flanking the portrait. These areas now carry a seal of the Federal Reserve Bank from which the money was issued and the Treasury Department seal with the value of the currency.

"We expect to go to the secretary of the Treasury next month with a recommendation and we expect a decision shortly thereafter," Ortega said.

The Treasury Department is considering invisible and visible changes to paper currency to foil counterfeiters, Robert J. Leuver, director of the Bureau of Engraving and Printing, told the House Banking subcommittee on consumer affairs and coinage.

Originally, Treasury officials considered changing the color of money as one way to make counterfeiting more difficult, but Ortega said that "color has not proved as effective as we had anticipated."

Rep. Doug Barnard (D-Ga.) said that he and his constituents were concerned that the Treasury would propose coloring money red, "with all the connotations" associated with the color.

The invisible changes would apply machine-readable material during the manufacture of the notes or use advanced computer technology to enable Federal Reserve Banks to detect counterfeit notes, Leuver said.

"The visible program is intended to add visible features to the note which deter casual counterfeiting on color copiers, complicate the task of the professional counterfeiter who uses other methods, and provide currency with a ready means of authentication at reasonable cost," Leuver said. The Treasury plans a campaign to alert the public about the changes in currency.

The currency changeover would take place about 12 to 18 months after a final decision is made, to allow time to alert the public and to change automatic teller machines so they disburse the correct currency denominations, Treasury officials said. Officials said 1988 is the earliest the new currency will be issued.

One of the changes under consideration is a thread, seen only when held up to light, printed with the words "United States of America," that would be incorporated in the paper. Another possibility is a type of hologram that changes appearance as the currency is handled.

The Treasury Department is not so concerned with counterfeiting by professionals but by casual users of photocopying machines that now can print in color on both sides of paper, officials said.