With House and Senate conferees set to meet today on the fiscal 1991 money bill for the National Endowment for the Arts, congressional sources were cautiously predicting that the agency would emerge without explicit restrictions on the type of art it may fund.

Most believed that the conferees would eliminate a last-minute amendment to the Senate bill by Sen. Jesse Helms (R-N.C.) that forbids "material which denigrates the objects or beliefs of the adherents of a particular religion." But key conferees Robert Byrd (D-W.Va.) and James McClure (R-Idaho) are strong proponents of content restrictions, so no bet is considered entirely safe.

The biggest battle so far is between Rep. Sidney Yates (D-Ill.), chairman of the Appropriations subcommittee on the interior, and subcommittee member Ralph Regula (R-Ohio).

The focus of the dispute is a provision in the House bill that instructs the NEA chairman to ensure that grants are awarded "taking into consideration general standards of decency and respect for the diverse beliefs and values of the American public." The Senate bill includes no such language.

Yates opposes such language but Regula said yesterday that he will not yield. "My bottom line includes the decency {provision} and we can bring the bill back in disagreement" if such language is deleted, Regula said.

Yates and Regula are seeking compromise language on that point. The two spent most of yesterday behind closed doors with Byrd and McClure, exploring possible ways to reconcile the House and Senate versions of the appropriations bill.

In some key respects, the House and Senate provisions on the endowment are similar. Both leave obscenity determinations to the courts. Both empower the NEA to recoup funds from grant recipients convicted on obscenity grounds. (The Senate bill also creates penalties for violations of child pornography laws.)

Few arts groups would have believed several months ago -- when the controversy was in full swing and members of Congress were being deluged with anti-NEA mail -- that the House and Senate would vote overwhelmingly for legislation free of explicit content restrictions.

But the House went along with a compromise that included the obscenity penalty and the decency provision, which was regarded as a watered-down restriction.

The Senate voted 73-24 Wednesday night for legislation -- sponsored by Orrin Hatch (R-Utah) and Claiborne Pell (D-R.I.) -- that imposes penalties on federally funded artists convicted of obscenity or child pornography. Sen. Jesse Helms (R-N.C.) failed in an attempt to impose restrictions on sexually explicit art.

For a brief moment, the endowment seemed assured of an appropriation without content restrictions. Then Helms attached the religion language on a voice vote in a virtually empty Senate chamber.

Yesterday, lobbyists and congressional aides tried to determine the fate of that restriction. Much speculation focused on Byrd, who has expressed disgust with some of the controversial works funded by the NEA. He supports restrictive language and was responsible for inserting a series of content restrictions in the appropriations bill even though four key members of the Senate Labor and Human Resources Committee had asked him to use the penalty approach instead. Those restrictions were knocked out on the Senate floor.

Some lobbyists and staff think Byrd will sacrifice the Helms religion restriction as a bargaining chip in the meeting with House conferees.

But that view was disparaged by one Senate staffer who warned that the arts lobby has consistently misread Byrd on the issue.

"For over a year, the arts people did not understand that this is a matter of personal conviction to Robert Byrd," that aide said.

Two factors that could influence the outcome are time and fatigue. The House and Senate have been slogging late into the night and members want to adjourn this weekend. "Why would anybody want controversy at this hour?" asked one lobbyist.