The National Endowment for the Arts advisory council yesterday approved without opposition and almost without discussion a pair of grants that support works by controversial performance artists Karen Finley and Holly Hughes.

At the council's last meeting in August, the group withheld approval from those grants and three others in an experimental-art category, citing a perceived potential for conflict of interest in the panel that reviewed the applications. That decision, which prompted bruising debate, enabled NEA Chairman John Frohnmayer to sidestep a decision on funding the artists before Congress acted on NEA reauthorization and funding legislation.

The grants were reviewed again by a new panel, which recommended funding all five applicants. (The previous panel had voted against an application by the Washington Project for the Arts.) The council approved the grants en bloc. The question now is whether Frohnmayer will exercise his veto power. He promised to make a decision "as quickly as possible."

Finley, who observed the proceedings, said she wouldn't comment until Frohnmayer makes a decision. "It's definitely not over yet," she said. The grant money would go to The Kitchen, a New York organization that would commission a new work by Finley and a collaborator. The as-yet-undeveloped work has been described as "a deconstruction of the television talk show variety format."

Finley declined to elaborate on the work. Her previous material, which focused on feminist themes, sparked controversy because she smeared chocolate on her semi-nude body.

Also approved was a grant for Hughes and a collaborator for a work titled "No Trace of the Blonde." Hughes could not be reached for comment.

Yesterday's meeting was the council's first since Congress approved a three-year reauthorization of the endowment in a legislative package that included a series of changes in grant-making procedures.

Like accident victims, council members spent a couple of hours trying to determine whether they perceived any injury to the endowment by the new legislation. After grappling with the changes, they voted to have a retreat to explore the question at greater leisure.

In the meantime, they could not agree whether their mood should be celebratory or funereal. Some argued that the three-year reauthorization of the endowment without explicit content restrictions was a victory, while others contended that the endowment has been threatened and even harmed by changes in grant-making procedures and a shift of money to state arts councils.

Looking at a summary of the legislation, council member Lloyd Richards said he was dissatisfied. "This to me is a very distrustful document ... and indeed insulting on a certain level," said Richards, dean of the Yale School of Drama.

Roy Goodman, a New York state senator, argued that the council should emphasize the positive. "Instead of worrying about all the Gulliver-like threads that hold us down, we've got to take a broad sword and cut out of it," he said. The council should send a message "that the arts are alive and well and we damn well aim to keep it that way."

But council member Ray Kingston, an architect, retorted to Goodman, "It's a wonderful speech ... but there is reason for us to be concerned."

Frohnmayer pleaded for a muted reaction. "I hope we won't get too much into the negative here because I'm not sure it's justified," he said. Much of the legislation simply codifies existing endowment procedure, he said.

The council touched briefly on the implications of a new provision requiring that grants be made "taking into consideration general standards of decency and respect for the diverse beliefs and values of the American people."

The discussion was deferred until the retreat, but Frohnmayer said the impact of that language is unclear. "That's a question that we have yet to be able to determine," he said. "I would hope that would not be overemphasized. It's clear that artistic excellence and artistic merit are the criteria" for awarding grants.

The council was alarmed by provisions that increase its authority in selecting grants and setting funding levels. Until now, the council has reviewed -- and generally approved -- recommendations by peer review panels. Its role has been advisory, but now the NEA chairman may no longer award a grant that has been opposed by the council. He retains authority to veto a positive recommendation.

But council members questioned whether they had the time and expertise to evaluate individual grants and set the amount of awards. "It may sound fine to dump this responsibility onto the council, but forgive me if I say I don't think we are capable of doing that in a responsible way," Richards said.

Council members were also unhappy about an increase in the percentage of grant money funneled to state arts councils. States had gotten 20 percent, but that figure will rise over three years to 27.5 percent. Taken with another congressional mandate to spend more on rural and inner-city programs, the endowment must redirect $11.9 million of a total of $114 million in grant money.