Louis W. Scheeder yesterday announced his resignation as producer of The Folger Theater, a position he has held since 1973.

Scheeder said the trustees of the Folger Shakespeare Library, which operates the theater, wanted him to produce four Shakespeare plays this year for $1 million, about $360,000 less than Scheeder felt was necessary.

"We were just too far apart," he said. "I've got the theater I always wanted. It's a very expensive machine, and I don't want to take it apart. They want someone who can build a cheaper machine."

Folger Shakespeare Library director O.B. Hardison, echoing what has become a familiar litany in arts organizations, said the current climate of rising prices, threatened cutbacks in federal grants, and a projected reduction in individual charitable gifts caused him and the trustees to "recalculate" income and expense projections over the summer. "We had originally set our sights higher," Hardison said. "But we have to be as prudent as possible. The competition for money is more intense, particularly here, where there are only two foundations that give money to the arts."

Hardison said John Neville-Andrews, a British-born actor, director and producer, will succeed Scheeder as producer. Neville-Andrews is now directing "The Fantasticks" at the Olney Theater.

The Folger Theater's former business director, Michael Sheehan, who left this summer to form an independent film company, said, "It is expensive to do Shakespeare the way Lou likes to do it. There is no Shakespeare play that has fewer than 19 in the cast; the average play has about 22. To do it right you need at least four or five weeks rehearsal. Plus there's the costumes, the sets, the original music we had for each play. We've gone beyond the time of using Reynolds Wrap for sets . . . He felt he couldn't compromise, and he wouldn't just tell them he could bring it in at $1 million and then not do that."

The theater's decision late last month to cancel its two productions of new plays at the Terrace Theater in the Kennedy Center was not related to this budget question, Hardison said, because those productions were to be funded separately.

In the 10 years Scheeder has been associated with the Folger, starting as Richmond Crinkley's associate, 54 plays have been produced, 23 of which were directed by Scheeder as well. Of these, five plays were world premieres and 10 were American premieres. At least five of these 15 went on to be producedin New York or elsewhere.

Scheeder will stay until Oct. 31 to complete his direction of "Julius Caesar," his 24th Folger production. He said he has taken an option to produce an off-Broadway version of "How I Got That Story," which the Folger produced last season at the Terrace Theater. He said he would not come back to the Folger to direct individual shows.